Zynga – Not Zynging It
Zynga has been on an on-going long and slow road to oblivion. Just in June we reported about Zynga closures and layoffs, which probably then linked to what we then reported in July is that Don Mattrick, former head of Microsoft's Entertainment Department left Microsoft to join Zynga as CEO.
While there has been a lot of speculation and discussion around why Don Mattrick joined. While we may never know the motivation and the backstory behind this decision, Don Mattrick now has a very big task ahead of himself as the company's new CEO. As the latest news now is that Zynga has been losing money and investors.
Through Reuters news, we discovered that Zynga Inc lost 18.6 percent in share prices (meaning that its investors are selling off their shares and thus losing faith in the company's future). At the same time Zynga has reported yet another bad financial quarter and lost 15.8 million USD (roughly 10.2 million British Pounds) in the three months ending 30th of June 2013. This is due to a drop in activity of daily active users in Zynga games, which has steadily being falling year-on-year. In spring 2012, Zynga had 72 million people playing its games every day, while this year that number is just 39 million. Heading towards a 50 percent drop! In line with this, monthly unique players have also dropped from 4.1 million to 1.9 million.
This has not deterred Don Mattrick's mood though, he remains confident that he can turn the company around (worth noting, he will earn at least 19 million Dollars in just his first year at the company).
As Mattrick explains "The next few years will be a time of phenomenal growth in our space and Zynga has incredible assets to take advantage of the market opportunity. To do that, 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."
Mattrick went on to explain "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. I'm privileged to lead Zynga and I look forward to spending more time with our players, employees and shareholders."
In response to these troubling figures and investor drop, Zynga has been cancelling dozens of its projects and may even need to announce further lay-offs. One such projects is its real-money gambling project. It has just been kicking off in the UK, but Zynga was hoping to bring it out in the USA as well, however due to the laws in the United States Zynga has had a tough time bringing the project out there and has now abandoned it all together. This is due to the fact that gambling with real money is illegal in many states in America, the most famous state where this is allowed is Nevada where people come in swarms to the desert anomaly we know as Las Vegas.
Don Mattrick has revealed some of his plans though and he intends to bring the company back to its basics and will shift its focus now to free-to-play games for Apple iOS and Google Android platforms. He will also have the company return focus to its famous franchise, FarmVille.
Only time will tell if Don Mattrick truly can bring the company out of its downward spiral, some investors according to Reuters have stated concerns about pulling out of real-money gambling in the United States, as this would have brought along an entire new group of investors.