Chances of prosperity are looking bleak for the social games developer. The financial report for 2013’s second quarter shows figures that could be alarming for any business that runs in the counts of millions.
Astonishingly, it is not just the revenue figures of the gaming house that have reduced; instead the losses seem to be a direct result of a declining interest among the users.
The number of monthly active users and daily active users has fallen to dangerous levels with a jump from 306 to 187 million for monthly active users while a drastic change from 72 million daily active users to a mere 39 million.
The effect of this was evident and eminent; revenues decreased by $101 million, falling from $332million to $231million! These figures were further detailed to tell that player daily spending had increased (no surprise there too) from $0.046 to $0.053 per person per day. This could be explained by the fact that due to the decreasing number of players, the remaining had to make up for it.
Another important update that broke through the report was that Zynga is now eyeing their previous business model of free to play games instead of the push to real money policies that they had recently been using. Apparently they believe that fans are leaving because they are dismayed at the push to real money features that make them pay to stay. Remember Zynga Plus Poker and Zynga Plus Casino.
The official statement goes:
While [Zynga] continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.
Though the situation looks austere to the third persons, Don Mattrick the new CEOof Zynga, former Microsoft Xbox Boss, seems unruffled:
It’s clear that the market opportunity around us is growing at an incredible clip. It’s also clear that today we are missing out on the platform growth that Apple, Google and Facebook are seeing. In short, we can do better, said Mattrick. Getting a business back on track isn’t easy and isn’t quick. We have a lot of hard work in front of us but I believe we can succeed as a team and Zynga can do this.
Now we know what Don has done for Microsoft in the past. He has the experience to handle something way larger than Zynga, do you thing he can take this sinking boat and point it home?