Zynga Adds New Games As Stocks Plummet For Second Day
Zynga is working to show investors that they can build a long-lasting business by turning its digital world into a more entertaining place.
Mercury News reports that the gaming company revealed new features on Tuesday, including a network that is designed to provide its 290 million players the same tools across all platforms, whether they are playing games on Facebook, a mobile device, or the company’s website.
The new network, called “Zynga With Friends” is a play off of one of their most popular games, “Words with Friends,” a Scrabble-like game. The company also previewed many new games, according to Mercury News, including two riffs on “Farm Ville,” called “ChefVille” and “The Ville.”
iDigital Times reports that investors were less than impressed with the announcements. Zynga stock still dropped by 5% to close at $5.76, continuing a downward trend. Ben Schachter of Macquarie stated of the stock’s downward trend that:
“Zynga’s media day clearly disappointed investors and we see few near-term catalysts to make the stock work from here.”
The company’s CEO Mark Pincus defended the event and new games, saying that, “These games have become something like hobbies for millions of people.” While Pincus is right in saying that the company is doing well, considering Zynga’s more than 290 million users and expected revenue of $1.4 billion in 2012, the figures simply have not impressed investors.
Bloomberg Business Week reports that Michael Pachter, an analyst with Wedbush, believes that investors are worried that the company could see a lower revenue if users get bored with the company’s game. Pachter wrote that:
“We disagree, and believe that the majority of gamers who discontinue playing Zynga titles are likely to be non-payers, with payers spending more as they make a greater investment of time in each game.”
Do you pay to play any Zynga games?