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July 9, 2012

Why Social Gaming Company Zynga is loosing Users




Post 6 months after Zynga's IPO and its stock price has halved,  to under $5 currently . That's because many of its high profile gaming products are tanking.


  Zynga's fortunes  of  social gaming was heavily dependent on facebook users  and it was among the  biggest risk it faced as a business. Its over-reliance on Facebook, with most of its revenue and users coming from the social network.





Why Zynga is Shedding Users: "Social gaming company Zynga had an outstanding 2011, leading to a well-hyped IPO in December. But Zynga's biggest risk was always an over-reliance on Facebook, with most of its revenue and users coming from the social network.

At the time of its IPO in mid-December, Zynga had the top five games on Facebook by daily active users. But, according to app tracking website AppData, three of those five apps have declined dramatically in Daily Active Users (DAI) since then.


The fact is that Zynga's fortunes are still ultimately tied to Facebook - and vice versa. Social gaming is moving onto smartphones and tablets, which is also where Facebook wants to expand its social networking platform. The reality is that both Facebook and Zynga need to aggressively expand onto smartphones and tablets, in order to get their stock prices moving upwards again.

All of Zynga's key  products have lost a lot of users over the past six months. Among them is  Cityville, which was  a leader in Facebook's gaming category,  which echoed Zynga's share price drop to fall from over 10 million to below 5 million daily active users"