Wednesday, July 25, 2012

(BN) Zynga Misses Sales, Profit Estimates; Shares Slide


Zynga Inc. (ZNGA), the biggest developer of games played on Facebook Inc. (FB), missed analysts' second-quarter revenue and profit estimates as the company struggled to add social game users.

Zynga has faced growing fatigue among its users, many who play fewer social games than before or have shifted to mobile apps. The company's best-known franchises, "FarmVille," "CityVille," and "CastleVille," all lost at least 20 percent of users between the first and second quarters of this year, said Arvind Bhatia, analyst at Sterne Agee & Leach Inc. in Dallas, citing AppData numbers.

"It's a disaster," said Bhatia, who has a neutral rating on shares of Zynga. "It's starting to look more and more like a fad, and any hope of a second-half recovery is shot with these kinds of numbers."

Zynga, based in San Francisco, makes money by selling virtual goods within its games -- say, a gun in "Mafia Wars" or a tractor in "FarmVille."


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