Social Gaming: Zynga Loses Half of its Active Users, Stock Tumbles
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Social Gaming: Zynga Loses Half of its Active Users, Stock Tumbles


This time last year, Social gaming powerhouse Zynga had 72 million daily active users logging in to play blockbuster games like Farmville, Words with Friends, and Draw Something. That number has plummeted to nearly half in the quarter that ended in late June, with only 39 million people logging in to Facebook to play games – which often require sending “invitations” that ask friends to download the software and join the virtual action.

“We need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company. We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters,” said Don Mattrick, Zynga’s newly-anointed CEO, in Zynga’s second quarter financial report.

Mattrick left his position as the head of Microsoft’s Xbox division earlier this month. He replaced Zynga founder and former CEO Mark Pincus, with Pincus staying on board as chairman and chief product officer. The troubled company was forced to lay off 520 employees – 18 percent of its workforce – in June.

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According to the report, revenue also declined by 31 percent from Q2 2012, reported at $231 million. The company also posted a net loss of $15.8 million. On top of daily log-ins, Zynga’s monthly active user base also dried up, like so many unattended Farmville crops. The company had 306 million last year, with only 187 million for the current quarter.

“The once top-dog has gone through a bit of a rough patch during the last year,” said ArsTechnica. “In the summer of 2012, the company quickly lost a bunch of executives and managers. That October, the company announced that it had overpaid for OMGPOP (maker of Draw Something) … Then Zynga suddenly shut down OMGPOP last month as well.”

The current string of bad news from Zynga also created a ripple-effect for the company’s stock. Fearful investors and an uncertain market sent Zynga’s share price tumbling by almost 15 percent.

Mattrick promised swift action to set Zynga back on track and maintained a positive outlook for 2014.

“I’ll move quickly and decisively to do what’s in the best long-term interests of our players, our employees, and our shareholders,” Mattrick stated during the company’s Q2 2013 earnings conference call, which took place earlier today. “There are some good winds at our back, and my job is to get our sails up and Zynga pointed in the right direction.”

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