Zynga Stock Price Tanks After Disappointing Third Quarter
Zynga expects a net loss of $90-105 million in the third financial quarter.
The troubled social game company warns that disappointing third quarter revenues means its earnings forecast for the remainder of the financial year would have to be cut. Zynga stock price lost about 20% of its value after this announcement. A delay in new titles and overpaying for Draw Something creator Omgpop were blamed for the drop in third quarter revenues, which are estimated to add up to a net loss of $90-105 million for the quarter.
CEO Mark Pincus in an official announcement said that, in the short term, Zynga would meet these challenges with targeted cost reductions and refocusing its game releases "to reflect our strategic priorities." "Let's not lose sight of the bigger picture," Pincus urged investors. "The world is playing games, and is increasingly choosing social games." Pincus went on to claim that Zynga represents three of the top five popular mobile games in the US, and argued that Zynga's strong mobile gaming position meant that the social gaming developer still had what it took to add growth to its web business.
This announcement comes on the heels of a Zynga staff exodus, and a string of high profile executive departures. At the moment there's little reason to think the fourth financial quarter is going to be any better than the previous three. Pincus admits that several high profile titles expected to launch in Q4 may suffer delays and that live web gaming isn't doing as well as Zynga hoped.
I have a feeling this won't be the last of these reports. I wonder if they'll even make it to the end of Q4 in one piece.
Zygna Tanks, EA: "You're welcome."
I wish I had the idea to short sell them when they went public.
actually i was reading about this on forbes earlier they said its pretty much zingas business model that is resonsible for them tanking as they have no creativity, etc and just rely on wholesale copying or outright buying of IP which means they have no long term sustainability
Good good a thousand times good. I hate this company and there derivative facebook games. Also I've been shorting their stock and have made some decent money through their failings so I'm happy on a personal and a financial level. Huzzah!
No surprise. While I will admit to having played some of their Facebook games in the past none of them really held me. The last month or two before I quit Farmville I was only continuing to play in order to satisfy my OCD by getting all the ribbons and full star ratings on all the crops(just gave up when they decided to add a bunch more, who says you can't overcome OCD?).
Even now I still play Scramble and Words with Friends with some of m family, but I have never spent a single red cent on their product and never felt the compulsion to do so. If you can't make a product that people want to spend money on then the long term success of your company is going to be severely restricted.
Just roll over Zynga (See what I did there).
You really are just a pimple on the video games industries ass. And everyone will be glad once your gone. I don't care for the mobile gaming stuff, so I could care less about them if it wasn't for all the IP copying and such.
Good riddance to em. Never fun to see people losing their jobs, but It's always a laugh to see corporations you hate keel over and die.
What more can I say? This is poetic justice at work. You shamelessly copy other games; you go down the crapper!
"Let's not lose sight of the bigger picture," Pincus urged investors. "The world is playing games, and is increasingly choosing social games."
Oh yeah. Totally. The world is constantly moving towards Social games in a steady pace. I will be playing my throat slitting social simulator known as Dishonored tomorrow. I bet I'll make tons of friends in that game! :D
Fuck off Zynga.