Zynga stock in free-fall
Draw Something started losing players who were tired of drawing the same things over and over and who were deleting the game from their phones and tablets. Zynga's shares started to decline and are currently trading at $2.38. That puts the value of the company's shares below the value of its real estate and cash, which combined is worth $2.46 a share. That means buyers of the stock now are essentially getting the video game business for free, although cash on hand could drop quickly. The company says it will write down $85-$95 million of the $180 million it spent on OMGPOP and analysts see weak earnings for the next few quarters.
After Zynga lowered its own estimate for the fourth quarter, Doug Anmuth from J.P. Morgan, said the figure was below his expectations for the period as newer titles he expected to do well failed to catch on with mobile game players. Sterne Agee analyst Arvind Bhatia is looking for the company to announce some layoffs, saying he was surprised by the magnitude of Zynga's lowered earnings expectations and how badly business has deteriorated. Wedbush Morgan analyst Michael Pachter lowered his target on the stock to $4 from $7.
source: LATimes via PocketLint
1. fervid (Posts: 173; Member since: 22 Nov 2011)
And here I thought Fake Crops were the next big thing.
2. BREvenson (Posts: 207; Member since: 17 May 2012)
Bound to happen. Zynga took a gamble by paying big money for a game that was still in its early rise to popularity, then tried to commercialize it and water it down by changing what subjects people draw (pop culture figures, food items, etc.) and making it repetitive. That, coupled with the many, MANY online games they made crowding the market and annoying others with constant updates about what their Facebook friends did in those games, caused people to just stop caring.
Personally, I never played their games. Downloaded Draw Something, but never once played it...
7. JeffdaBeat (unregistered)
Absolutely right on this one. Paying so much for Draw Something was just stupid. Most games, if lucky, have an arch of becoming super popular, but slowly fading into obscurity as folks move on to different games. They should have held back to see if the game could maintain its audience or at least paid a lot less for it.
I'm tired of these games where I have to pay for more options. Some games allow you to earn features or pay for them if you don't want to work for it, but Draw Something always bothered me because I had to pay just for more colors. These games are fads more than anything else.
9. downphoenix (Posts: 2357; Member since: 19 Jun 2010)
I will admit, I liked Draw Something. I paid for the ad free version prior to the Zynga buyout, but didnt pay for coins, didnt really see a point to it. But the Zynga buyout ruined the game. The updates they did caused it to be an inconsistent app with random crashes and longer loading times, and it took Zynga a while to add in new words and such, whereas OMGPOP was doing it at a pretty steady rate prior to the buyout. I gave up on the game by the time Zynga started offering good support for it.
3. -box- (Posts: 3821; Member since: 04 Jan 2012)
I enjoyed Draw Something before the acquisition, but then switched to Windows Phone (which didn't have it, and doesn't have any Zynga games to my knowledge) and that was about the same time DS took a downfall. I don't hear of folks playing Words With Friends anymore, which I enjoyed the gameplay but hated the constant updates and crashes; poorly coded and cheaply developed, and while trying to make one game run on multiple platforms is admirable, is very difficult, especially in a market as fickle as mobile
4. downphoenix (Posts: 2357; Member since: 19 Jun 2010)
This is a good thing. Zynga is bad for the gaming market. While Free 2 Play is a good thing, its not when its about buying energy. Also games like Words with Friends and Draw Something are both fads, nobody plays either of those anymore.
12. DetroitTech (Posts: 55; Member since: 02 Nov 2011)
A lot of people still play words with friends. It's Scrabble. That's like saying nobody plays cards anymore... It may not be trillions of people but it will always be one of the best games considering it doesn't require a joystick. IMHO.
5. e.wvu (unregistered)
They need to get started on a new game soon.
6. OpTiMuS_BlAcK (Posts: 411; Member since: 04 May 2012)
Zynga uses Free2play but it's always Pay2win ._.
They even bought then shut down one of my most played games on facebook,
"Ponzi Inc.".... That's when I really stopped playing any of their games.
8. dragonstkdgirl (Posts: 144; Member since: 07 Apr 2012)
I still have DrawSomething installed and barely touch it. Once counted thirteen pop up fullscreen ads in one turn. I keep changing my review on their Play Store page hoping it will change but it doesn't. People got sick of having ads and bad programming shoved down their throats.
10. jroc74 (Posts: 4947; Member since: 30 Dec 2010)
I'm glad I sold it when I did....lol.
Funny thing tho...if it bounces back...now is the best time to buy.
11. downphoenix (Posts: 2357; Member since: 19 Jun 2010)
It wont bounce back. Zynga will be dead in 2 years. The few games they have that still have a player base to them will probably get bought out and taken over by someone like EA so that Zynga can liquidate their assets.
13. daniel_bargs (Posts: 323; Member since: 27 Nov 2010)
i really want them to go bankrupt! damn them. Cityville is the most played online game in the world at 150million during its peak and im so addicted... until it became boring because you need to pay for this and this in order to move forward which is disgusting! almost every step needs a payment! i know they need money but i think they have gone too far! now i stopped Cityville for almost a year already.
hahaha im so happy they are falling! i already predicted it because i stoppped playing their games.