Social Gaming Provider Zynga Hits Rough Patch As Facebook Gaming Loses Luster
Social gaming company Zynga watched its stock decline by more than 10 percent on Tuesday which in turn triggered a “circuit breaker” that halted trading at the social gaming firm. The company’s troubles are believed to be directly tied to concerns that Facebook users are finding sources other than Facebook to engage in social gaming.
Stock prices began to crash after analysts at Cowen & Co posted comments in which they claim Facebook-based gaming may have reached its peak. Other reports noted that the social networks gaming platform appears to be witnessing lower growth than in the past as gamers move towards mobile entertainment options that do not require Facebook integration.
Zynga offers a solid mobile gaming platform however the social gaming network has relied on Facebook integration to attract new users and then to keep them engaged in its games.
The social gaming network has realized in recent months that its reliance on Facebook is not a safe bet for the future, going so far as to launch its own platform and partnering with AT&T to get games in front of potential wireless customers.
Regardless of Zynga’s future plans a bulk of its revenue is still earned through Facebook and the company pays 30% of its revenues to Zuckerberg and his teams of social media experts.
On Wednesday Zynga shares witnessed a rebound but they still sit below the company’s original $10 initial public offering price.
Zynga could reverse its fortune through mobile gaming however the success of that move has yet to be fully realized.