Zynga Ditches Real-Money Gaming Idea in U.S.; Investors Not Happy
July 26, 2013 3:02 PM
Zynga said it will now go "back to basics" and offer free-to-play games on mobile devices like Apple's iOS and Google's Android
can't seem to catch a break
lately, and recent news of its plans to ditch real-money gaming (RMG) isn't helping.
Zynga announced that it will no longer seek to offer RMG -- which is basically gambling -- in the United States due to the fact that gambling with real money is illegal in several U.S. states. Obtaining the correct licenses would be a struggle, and Zynga prefers to focus on other areas right now.
This news didn't sit well with investors, where many only owned Zynga stock in the first place because of the potential of RMG. Macquarie (USA) Equities Research cut its target for the stock to $2.75 from $3.00, and Needham & Co analysts downgraded the stock from "buy" to "hold."
Zynga, the social gaming company responsible for the likes of "FarmVille," has been having a terrible time lately. It lost 40 percent of its monthly active users in Q2, and revenue dropped 20 percent.
Zynga has experienced financial trouble since its initial public offering (IPO). It filed its Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) on July 1, 2011 and began trading December 16, 2011 at $10 per share. However, stock fell throughout 2012, hitting as low as $2.27 per share by October.
Last month, it announced plans to lay off 18 percent of its workforce (or about 520 employees) by August 2013. It had about 2,900 employees at the time of announcement.
The layoffs are expected to save Zynga about $70 million to $80 million.
The problem with Zynga is that it can't keep up in the mobile space. Its Web business has been declining faster than expected, and its mobile efforts aren't enough to fill the gap.
Another issue for Zynga is that its
casual, social games
don't seem to have long-term viability. It has had to axe 18 games in recent months -- including PetVille, FishVille, Mafia Wars 2 and Vampire Wars -- due to reduced popularity (and to make room for new games).
While Zynga still has a few successful games, like FarmVille, they haven't moved to the mobile space quickly enough, and players have increasingly lost interest over the years.
Zynga said it will now go "back to basics" and offer free-to-play games on mobile devices like Apple's iOS and Google's Android.
Earlier this month, Don Mattrick -- the president of Microsoft’s Interactive Entertainment Business -- left Microsoft to become
Zynga's new CEO
. His new position will clearly be a challenge, but it looks like he's already helping to make some big decisions.
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
UPDATED: Microsoft's Xbox Head Leaving Company to be Zynga's CEO
July 1, 2013, 2:21 PM
Zynga to Lay Off 18 Percent of Staff by August
June 3, 2013, 8:06 PM
Games Could Make Facebook Biggest Bank by 2015
April 13, 2011, 10:03 PM
WhatsUp with WhatsApp?
August 29, 2016, 5:23 AM
Fuchsia – Google’s New Open Source Operating System
August 17, 2016, 6:30 AM
Windows 10: End of an Era & A New Beginning
August 1, 2016, 9:59 AM
Free Windows 10 offer ends July 29th, 2016: 10 Reasons to Upgrade Immediately
July 22, 2016, 9:19 PM
Quick Note: Whoops, Microsoft Pushed Unwanted Windows 10 to Some Users
October 15, 2015, 9:04 PM
Quick Note: Windows 10 Insider Preview Build 10565 Fixes Boot Camp 6.0 Issues
October 13, 2015, 11:39 AM
Most Popular Articles
Car Insurance - The Hidden Discriminatory Practise
October 18, 2016, 5:00 AM
Tesla Announces Level 5 Autonomous Driving
October 19, 2016, 8:30 PM
Apple iOS Contains Secret One-handed Keyboard Code
October 22, 2016, 5:00 AM
Thieves Love iPhones – More than $13,000 Stolen from Apple Store
October 21, 2016, 7:13 AM
Do you hate to do yard work?
October 20, 2016, 5:00 AM
Latest Blog Posts
Key EpiPen Competitor Out in 2017 At ' Very Low' Cost
Oct 27, 2016, 5:30 AM
Researchers use CRISPR to Accelerate Search for HIV Cure
Oct 26, 2016, 5:00 AM
Medical Council of India Makes Generic Medicines Mandatory
Oct 25, 2016, 5:00 AM
MacBoo Pro 2016: Release date Oct. 27
Oct 24, 2016, 7:16 AM
Mac Users, Try this if Your Mac is Infected?
Oct 23, 2016, 7:00 AM
Tips to Prevent Smartphones From Overheating:
Oct 22, 2016, 5:00 AM
Nasa Flies Drones at Nevada Airport
Oct 21, 2016, 8:21 AM
T-Mobile Data Problems
Oct 20, 2016, 10:17 AM
Annoying Apple Watch Problems and How to Fix Them
Oct 20, 2016, 5:00 AM
Your Mail May Soon Be Delivered By Robot
Oct 19, 2016, 9:34 AM
2018 Jeep Wrangler Prototype Sells At Junkyard
Oct 18, 2016, 5:00 AM
Samsung Shines with Gold Edition Tablet
Oct 17, 2016, 9:24 AM
Tesla Hints Mysterious Product Debut for October 17th
Oct 16, 2016, 10:14 AM
Samsung Galaxy Note 7 Phones on US flights
Oct 15, 2016, 5:00 AM
Comcast Fined $2.3 Million For Unconfirmed Services Charged To Customers
Oct 14, 2016, 5:00 AM
“American singer / songwriter “Bob Dylan is awarded 2016 Nobel Prize in Literature.
Oct 13, 2016, 10:33 AM
Battery Defect in Medical Device
Oct 12, 2016, 5:00 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information