ZYNGA PLANS ITS OWN SOCIAL NETWORK AND LEAVE FACEBOOK, BUT THIS WON'T SOLVE ITS DRASTIC DECLINE IN GAMERS

Click image to view Zynga With Friends website

Zynga, the titan of time-wasting, is broadening its distribution base with a new social network called “Zynga With Friends,” where players can build profiles and connect with other players while wasting epic amounts of time, according to the company, which announced the plans on Tuesday. In addition to giving gamers a new go-to destination for flushing their lives down the toilet, the move is interesting because Zynga With Friends will be an alternative to Facebook, where most Zynga games are currently played.

Indeed, it’s worth noting that Zynga With Friends replicates many of the features and capabilities offered by Facebook, including profiles with pictures and interests, messaging, chat, and status updates. It also offers real-time multi-player mode, for simultaneous collaborative game-playing. Zynga With Friends can be accessed via multiple platforms, including laptops, smartphones, and tablets.

In a bid to spread buzz and build traffic, the company is opening Zynga With Friends to other game developers, including Phospher Games, Sava, Crashlab, Fatpebble, and Atari (yes, you read that right: Atari is producing a game for Zynga to commemorate its 45^th anniversary).

Zynga has long hinted that it would like to lessen its dependence on Facebook, which takes a 30% cut of revenues generated through sales of virtual goods to casual gamers. These revenues, in turn, still make up a substantial part of Facebook’s bottom line -- some 11% of total revenues in the first quarter, plus another 4% from advertising on Zynga games. While Zynga still relies on Facebook’s payment system for sales on its own site, strengthening its own site may be a preamble to setting up its own payment system, heralding the end of revenue sharing with Facebook (at least for games played outside Facebook).

That would be more bad news for Facebook, which is struggling to demonstrate sustainable growth to Wall Street analysts and investors. If advertising revenue growth continues to slow, this would leave Facebook all the more dependent on revenue streams like Zynga’s virtual goods sales -- just as Zynga is pulling away.

COMMENTARY:   It's about time that Zynga unhitch itself from dependance on the Facebook platform.  According to Zynga, it has 232 million monthly active users
 and 60 million daily active users.  Its social games include:

• Bubble Safari 
• Castleville 
• Cityville
• Empires & Allies
• Farmville
• Hidden Chronicles
• Pioneer Trail
• Mafia Wars 2
• Zynga Poker
• Words With Friends.  

In a blog post dated June 12, 2012, I posted a body of evidence that strongly suggests that Zynga's best days may be over.  Nearly all of its games, including its two biggest winners, Farmville and Mafia Wars, have experienced drastic drops in monthly/daily active users between Janaury and May 2012.  These are not good times for Zynga.  It's IPO on December 16, 2011 was considered a flop.  Shares came out at $10.00, but dipped to $9.50 at the end of trading.  It's share speaked at $14.69 on March 2, 2012, but have declined dramatically since that date.  As of today, Zynga's stock (NASDAQ:ZNGA) have dropped to 5.44, with a market capitalization was only $4.01 billion.   Rumors that they maybe acquired by Facebook are rampant.  Analysts have downgraded the stock believing that its business model is not sustainable.

Whether Zynga With Friends will allow it to keep its traffic numbers and retain most of its revenues remains to be seen.   Most of the articles I have read believe that unhitching itself from Facebook, could be a huge mistake.   Facebook will also feel the loss.    

• Zynga's gross revenues for the year ending December 31, 2012 were $1.140 billion.  
• It paid Facebook 30%, or roughly $330 million.  
• It ended the year with a net loss of -$404 million.   
• R&D for the year ending December 31, 2012 was $727 million.   

Zynga needs new hit games with lasting power.  However, recent trends show strong evidence that social games are losing popularity, and users are flocking to other gaming or entertainment sites.

I have yet to find a single social media or stock analyst that believes in Zynga anymore. 

Courtesy of an article dated June 27, 2012 appearing in MediaPost Publications The Social Graf

Comments

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[AllenCarlos]

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[モンクレール コピー 見分け方 韓国]

Super idea of bloog.I'm from Italy I read many publication about it.Kind regards from Germany.

[Allison Tate]

Well I hope for there success but this definitely won't be easy.

[promotion website]

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