You guys, you've got to believe Zynga. The company can totally get twice as many people playing their games. They're serious. For real!
The past month hasn't really been a good one for Zynga's public image. Even though it thinks it's worth at least $1 billion, its profits have been steadily dropping, it had $100,000 worth of stuff stolen by a temp worker, and then there are the accusations of CEO Mark Pincus using bullying tactics to take back stock options from certain employees. Now, the company is trying to woo investors by claiming it will be able to double its user base.
Speaking at a Boston hotel luncheon with potential investors, Pincus addressed the fact that, in spite of a huge active user group, only a small portion (about three percent) are really generating money for Zynga:
Most of Zynga's revenue comes from more than 227 million monthly active users who buy virtual items such as houses and tractors while they play free games on the Internet. Only a small portion -- about 7.7 million for the 12 months that ended September 30 -- are considered unique paying players.
"We could see that doubling," Pincus said at the luncheon at a Boston hotel. He did not give a time frame for meeting the target.
According to Pincus, Zynga's daily average users on mobile devices is up to 13 million from 11.1 million a couple of months ago. On top of that, Words With Friends has been a huge success for the company, up to 10 million users from 2 million last year. While those are certainly promising signs for investors, Pincus's vague statement feels a bit too much like something you'd hear from the dude on the street corner who wants to borrow a couple of bucks but promises to mail it back to you, with interest.