Zynga Disappointing 2nd Quarter Result Could Prove Fatal For Facebook: Facebook Shares Down Drastically!

Must Read

The Hacking Of Jeff Bezos’ Phone: Facebook Blames Apple!

Hacking someone's phone through some malicious app or by injecting some code is nothing new. But when...

Google, Microsoft Buying Your Sensitive Personal Data From Avast Antivirus!

Your antivirus software may or may not protect you as much as you’d expect, but they are...

Which Countries Have the Biggest Share in the Global Gaming Market?

The global gaming market is expected to rise from $152 billion in 2019 to $196 billion by...
raghuhttp://dazeinfo.com
Industry analyst, crazy about writing, blogging, known for creative thoughts, traveler. Like to go Gaga for video games

Zynga with over 292 million active users, is one of the top revenue providing source for Facebook. Facebook scooped up 15% revenue in the first quarter of this year, which was the contribution by Zynga alone.

But the second quarter result of Zynga was below the expected range which led to the disappointment to the analysts (Wallstreetjournal). Its stock value went down to nearly 40% at the early after-hour trade. Just imagine its direct impact on Facebook’s revenue, especially with the “not so impressive” Facebook IPO. Is this going to be a problem for Facebook too?

Zynga’s revenue drop:

As per the released report of Zynga, the firm incurred a loss of $22.8 million or 3 cents a share. Zynga earned a revenue of $332.5 million for the second quarter of 2012 which is below the expected range of $344.12 million by the analysts ( as per Thomson Reuters I/B/E/S).

Advertisements

It’s almost 11% decrease in the expected revenue by Zynga. Also the bookings fell down to  8% compared to the first quarter of 2012. A decrease of 90% compared to the first quarter of 2012 was seen for Non-GAAP net income.

It is mentioned in the report:

“We are lowering our outlook to reflect delays in launching new games, a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform, and reduced expectations for Draw Something.”

Reasons behind Zynga’s slashed Q2 results:

One of the reasons for Zynga’s slashed results is that some of its games did not go well, including draw something and moreover Zynga also held Facebook responsible for its decrease in revenue, partially. Facebook changed its algorithm, leading users to play new games (like the villi type games) online other than the existing Zynga games.

John Schappert – chief operating officer of Zynga said “Our users did not remain as engaged and did not come back as often. Instead new games were promoted.”

Advertisements
Facebook’s IPO drop:

This month Facebook’s stock value dropped to 7%, eventually leading to the removal of Mark’s name from the top 40 billionaires in the world, as per bloomberg. Facebook’s IPO value is currently fluctuating between $28 -$29, which is way lower than its initial pricing of $38. Facebook’s stock has already stirred dissatisfaction amongst most of its shareholders.

As Zynga is a contributor for Facebook’s revenue and due to the revenue decline of Zynga, eventually Facebook might have to face difficulties pertaining to its revenue growth. Moreover, problems related to Facebook’s IPO also might add up, resulting in overall revenue decrease. Facebook seriously need to understand the pulse of the online gamers and their interests and try to change its algorithm.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Google, Microsoft Buying Your Sensitive Personal Data From Avast Antivirus!

Your antivirus software may or may not protect you as much as you’d expect, but they are...

Which Countries Have the Biggest Share in the Global Gaming Market?

The global gaming market is expected to rise from $152 billion in 2019 to $196 billion by 2022. Undoubtedly, gaming has become...

The Hacking Of Jeff Bezos’ Phone: Facebook Blames Apple!

Hacking someone's phone through some malicious app or by injecting some code is nothing new. But when the matter belongs to one...

Amazon India Food Delivery Business: An Emerging Threat for Swiggy and Zomato?

After establishing its prowess in one-day delivery and two-hour delivery, Amazon India is looking to expand into the domains of food delivery....

India the 3rd Worst Economically Affected Nation by Internet Shutdowns in 2019: Report

2019 saw an increasing awareness about internet shutdowns in the Indian population due to unprecedented first-hand experience with the phenomenon, especially in...

Amazon and Flipkart Under The Lens Of Indian Authorities For Competition Squashing Activities!

The ongoing tug of war between Offline and Online retailers in India seems to be far from over. On Monday, the Competition...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This