Zynga loses $15.8M in Q2, nearly half its daily users year-over-year

Still can't figure out, month after month, how this lousy company is still in business. Some truly mind-blowing stuff here. Zynga folding is now expected. Mattrick will be gone in < 90 days and then the ship will finish it's descent into deep waters. Unfortunate for the employees who have been (and are being) laid off. But this company has always been a model for failure. Ripping off and blatantly copying games to monetize briefly using FB's platform and then leveraging the temporary growth into huge VC investments to quickly cash out and disappear is the epitome of scum leadership and vision.

This company has always been and always will be a pure scam. Period.

I think that Zynga's major problem is a about changing markets: Zynga grew rich making clones of other games and cleverly using web-based-social-promotion via Facebook to advertise them cheaply. But now they face the same problem that Facebook itself faces - that more users are now mobile based than web-based - combined with the fact that much bigger companies are now not only licencing/cloning games but also combining them with their existing IP which has a much bigger draw for users because of the combined marketing clout behind it.

For example:

* Disney/Pixar now have two top free to play apps based on combining Temple Run with their existing IP. These games not only follow a proven winning formula, but they also piggy back on the movies marketing budgets to promote the games (to a much larger extent that Zynga could afford)

* Universal Pictures has cloned Temple Run Zynga style (but with much more original flair) to make their Despicable Me app game. Like Disney their massive film marketing budget drives the games success, and rather than users having to "warm up" to new characters, the lovable minions are already there for instant recognition/gratification.

* Rovio has made great strides making their original IP (Angry Birds) worthy of Disney level acclaim, but they've also heavily co-branded (via advertising and Angry Birds Star Wars) in order to increase profits.

Ah yes, the "Shit got old" symptom.

Every startup needs to watch out for this one. Users are aquired in several different ways, 2 main ones are:

- Tricking users into your product or service through gimmicks, lies, or aggressive marketing.

- Earning users by solving their problem and selling them value.

Zynga did the former and users are getting sick of it. Other examples are infomercial products, they sell like crazy based on promises and gimmicks and fade away into oblivion in the mid and long term. Think back to all the things you've seen on TV (especially exercise products and makeup brands), how many of them are still around? Despite many of them being successful and collecting dust in millions of homes' basements, they fizzed out.

I don't like the model of paying for a digital object that doesn't do anything besides bypass a bit of code that makes the experience more laborious or time delayed.

I personally download these games and play the shit out of them, but never ever give them money. It becomes a different aspect of the game -- sure, I have plenty of money to give you, but I don't think I should give it for something to speed up the experience -- I mean, you designed the experience, so it becomes a personal challenge until the game becomes boring -- oh, and I never mention it to anyone else, as to remove the word of mouth part.

I happily pay for good games that don't use this mechanic and tell my friends about how rad they are. It's how I speak with my wallet.

Marco Arment twitted this today and I wholeheartedly agree,

"It’s hard to celebrate a big company’s misfortune since it involves so many people’s jobs, but fuck Zynga and good riddance to their profit."

It's almost as though form-over-content and superstimuli combined with an easy-cash mentality aren't compatible with long-term profitability! What is this world coming to!

Mark Pincus has a Stasi-like scheme which is how Zynga uncovers game ideas and other business secrets. It involves using the accounts of people under his influence, use of false identities and phishing. Offering a job in some company is another way he uses to have victims volunteer information or answer questions. Not even these tricks has saved Zynga after they lost the guaranteed traffic deal with Facebook.

Mark Pincus is unlikely to get caught, but as the CEO of a publicly traded company, supported by Kleiner and others, he was a criminal, like Richard Nixon but on a smaller scale.

I find it weird how this story/event/business is positioned. Basically Zynga is a collection of mostly similar games. All popular games follow the same life cycle. If a game is good, people play the game. The game becomes popular. Then people get bored of the game, and they stop playing. I feel sorry for people, especially those at Zynga, who didn't see this.

I wonder about the long term viability of these sorts of pay to win games; they seem awfully vulnerable to the whims of the platform owners, and they're easy to paint as more like tobacco than they are to toys or video games.

Personally, I'd like to see them all crushed, their offices burnt to the grown and sown with salt -- Zynga delinda est and all that.

Like a lot of people, this just makes me feel vindicated.

As someone who has actually bought Zynga games, I could post you the back-and-forth, back-and-forth, back-and-forth, email thread I had with their tech support over the most minor issue, but it wouldn't help anything. (Essentially there was a minor bug in a game between me and this other player but their only "solution" was to block the user for 3 days and then restart.)

All those promising companies they bought have been swallowed by the beast and now die in its belly.

Like Dextrose with their Aves engine.. that looked truly impressive then they sell out to Zynga and who knows what crapware their innovation is now powering.

Hopefully some of that sees the light of day again.

Good riddance.

depending on the streaming quality, chromecast could help zynga port games to the TV and create new types of gaming experiences centered around the TV (where devices are controllers, and a laptop/desktop is the brain).

And the afterhours trading is crazy

I've been betting heavily on a turnaround, adding to my position in ZNGA each time it dipped below $3. Real money gambling I knew would be the savior and since they weren't burning much cash any more, they just had to wait for that to pass in the US.

Them canceling those plans - and Mattrick saying they are 'resetting' and expect volatility to continue, makes me lose my faith. I think I'm going to get out of the stock.

I don't know much about Mattrick so maybe he is a turnaround specialist and what he did at EA and Microsoft was great and he will save the company - but the business they are in is a loser. And they don't appear to be interested in a pivot.

Sad day. I now agree with the sentiment that Zynga is a dead company.

Worst companies for employees