Is it Game Over for Zynga in 2013?
Zynga (NASDAQ:ZNGA) may be set to launch its latest money-making efforts in 2013 with two online gambling platforms developed for the United Kingdom, but the company’s traditional gaming business is in trouble; in the past 20 days the company has lost 23 million monthly active users, sparking concerns that its MAUs could be completely depleted by 2014.
Why is Zynga bleeding users?
As VentureBeat’s Dean Takahashi noted in an summary of the year’s biggest gaming trends, 2012 was a big year for mobile game development. “Companies are following the users, with 44 percent of people now playing mobile games,” he wrote on Friday. “In this environment, getting lots of users matters as does monetization strategy.” Zynga has tried to modify its business strategy to align with this change in the industry, however the company has had difficulties transitioning away from its dependence on Facebook (NASDAQ:FB) games towards mobile.
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For much of its history, Zynga has bent its focus towards casual games that appeal to a wide range of users, are not overly complex, and do not required a significant amount of user commitment in terms of money or time. However, as a result, these games are less engaging and do not monetize well. While the company has tried to diversify its gaming options through several acquisitions, Zynga purchased the developer A Bit Lucky in September and OMGPOP earlier this year, these deals have not paid off. The game developer is hoping that A Big Lucky’s offerings will appeal to the male demographic, but OMGPOP has already failed. The deal forced Zynga to write off between $85 million and $95 million in its most recent quarter.