
Zynga's Profits Down by 95% - bane
http://www.gamepro.com/article/news/223371/zyngas-profits-down-by-95/
======
EponymousCoward
Good. Suck it. This company is pure slime. I pity their acquirees. And it's
totally worth my karma hit to just get this off my chest.

~~~
suking
Can you expand on why you feel that way?

~~~
RobPfeifer
Probably something similar to what's described here: <http://bit.ly/qAb7nM>

Perhaps they've changed their tune, but early on Zynga had a questionable
ethical reputation

~~~
salemh
Shortened URL = <http://www.sfweekly.com/2010-09-08/news/farmvillains/>

Try not to do so (HN rules and all that)

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dan_manges
Since their revenue was up, this doesn't mean much without knowing more about
"higher than normal spend on hiring, acquisitions and international growth."

~~~
scottkduncan
Well their daily active users were down despite hiring and acquisitions. Pre-
IPO, I would say that a declining user-base is not a selling point for a
social company.

~~~
robryan
Could this just be a gap in between new games? Zynga games do seem to be
sticky and addictive but there is going to be a lot of attrition the longer a
game is around.

~~~
scottkduncan
Yes, I imagine that could definitely have something to do with it. I also
think part of it is that others (Sims Social) have shown they can build sticky
and addictive games as well and Zynga is no longer the sole owner of the
space.

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teej
Disclaimer: I was previously a Zynga employee and I am presently a holder of
Zynga stock. I have no knowledge of Zynga's current internal state - the
following is entirely speculation.

=================================

There are many forces at work here that need to be brought to light.

* Macro Trend #1 - Facebook's web traffic is in decline[1]. These users are shifting to mobile as their primary consumption channel for Facebook. No facebook app developer has presence on the mobile app.

* Macro Trend #2 - Zynga's game launches are smaller than ever. For many reasons, it's getting harder to launch a 5M+ DAU game.

Zynga is responding to these trends in several ways.

* Leverage their warchest[2] to make acquisitions. This lets them launch a higher volume of games and help them get a foothold in mobile. Zynga has made a LOT of acquisitions this year[3].

* Further monetize their existing base. They've been pushing partner deals really hard recently, doing deals with Lady Gaga[4], Amex[5], and Capital One[6]

Zynga's games are more high quality than ever. Gone are the days of "fuck
innovation", two of Zynga's most recent releases are the best they've ever
built. The issue is that the market for FB games is in decline - the next big
wave is mobile. If Zynga can become a player by launching a hit or acquiring a
large chunk of the space, they'll be doing better than ever. But so far,
Zynga's mobile releases have flopped.

TL;DR - Zynga's profits are a sign that they have doubled down on acquisitions
to counter-balance a market shift from web to mobile. Their future prospects
lie in their ability to generate hits on the iPhone.

=====

[1] - [http://www.insidefacebook.com/2011/06/12/facebook-sees-
big-t...](http://www.insidefacebook.com/2011/06/12/facebook-sees-big-traffic-
drops-in-us-and-canada-as-it-nears-700-million-users-worldwide/)

[2] - [http://www.insidemobileapps.com/2011/08/11/zynga-
credit-1-bi...](http://www.insidemobileapps.com/2011/08/11/zynga-
credit-1-billion-acquisitions/)

[3] - <http://mashable.com/2011/05/18/zynga-dna-games/>

[4] - <http://mashable.com/2011/05/10/zynga-gaga-gagaville/>

[5] - <http://www.zynga.com/about/article.php?a=20101130>

[6] - [http://blog.games.com/2011/09/19/farmville-cityville-
pioneer...](http://blog.games.com/2011/09/19/farmville-cityville-pioneer-
trail-capital-one/)

~~~
michaelochurch
You forgot to mention that Zynga is one of the major reasons _why_ Facebook is
starting to decline in the U.S. People _hate_ Farmville and Mafia Wars and the
associated spam.

That said, Words With Friends is an excellent implementation of Scrabble and
it's actually social, not alienating like that Farmville garbage. It's quite
well-polished. I respect the attention to detail.

~~~
brown9-2
Why would non-Farmville-playing users leave Facebook because they are tired of
it's spam when they could just hide posts from it?

~~~
TheCapn
Consider the majority market of Facebook users, many don't know how to "hide
posts" and will often be turned off whent their facebook wall begins to look
like their hotmail account.

Don't always assume the average user has the know-how you do and don't always
assume they're interested in solving the problem either.

~~~
orclev
And even if you know how it seems like every time I log into facebook
(admittedly rarely) there's a handful of new spam games making the rounds.
It's a little frustrating that there's no blanket option of block all of the
stupid game spam, or switch from a blacklist to a whitelist. I'd much rather
un-block specific games than have to block every game ever made.

~~~
dasil003
Probably time to block a few of your friends.

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nhangen
I'm not a fan of their games, but I do want them to do well....not sure why.
Maybe it's because I feel that out of all the latest IPO's and IPO rumors,
they have the closest to an actual business, or because I want a gaming
company to do well since I make games.

Either way, 95% is a lot, and this doesn't bode well at all for anyone lower
in the food chain.

~~~
zemo
Have you played a Zynga game? In Zynga games, you cannot complete the core
objectives without recruiting other people to play the game or by paying
money. Zynga's products are pyramid schemes masquerading as games.

~~~
nhangen
I don't doubt that, but they seem to make people happy judging from my FB
feed. I think they found a way to make non-gamers feel good about gaming,
which I'm for. Maybe Zynga can be a gateway drug?

~~~
bluedanieru
Why do you want non-gamers to "feel good about gaming"? Why do you care? Why
is this kind of thinking so prevalent among the gaming community? You don't
see golf enthusiasts concerning themselves with the general population's
interest in golf. You don't see golfers applauding courses opened up with the
sole purpose of getting everyone on the planet to golf (in fact it's often the
opposite).

Not everyone has to play video games or want to.

~~~
richardw
Let the man care about what he cares about. If he wants more gamers, that's
his right. Unless he's actually impacting your life, live and let live.

~~~
bluedanieru
What the hell kind of comment is this? It's a discussion forum, we're
discussing.

I care more about gaming than I probably should, and I'd welcome a larger
community as well, but not if it means gaming comes to resemble the lowest-
common-denominator shit we get from Zynga, et al.

~~~
richardw
Well, to paraphrase your own comment above, golfers don't care that there are
many other shit golf courses being created around the world. They just play
golf on courses they like. Why do you care if others are playing shit made
from Zynga? You have a lot of opinions about others comment styles, what they
care about etc, but frankly economics doesn't care whether you like games or
not. If there's a market, it sells.

~~~
bluedanieru
I suspect golfers would start to care if mass-market trends impacted the
quality of their own courses.

Maybe you should stick to articulating your own opinions, rather than
expanding on another's for him? I don't care if people play whatever rubbish
issues forth from the bowels of Zynga's marketing department, but I'm not
going to celebrate it in the name of getting more people playing games,
either. At any rate your beef seems to be that I commented at all, or that you
think I was rude, or just that I posted something you don't wholly agree with,
or that I was criticizing someone's 'comment style' whatever that means (I
think the pot might be calling the kettle black on that one). Not sure really
what your problem is with me personally but my patience for your pointless
sniping has worn thin so I think I'll conclude with 'fuck you' and be done
with it.

~~~
richardw
Your reddit personality is leaking. You seem to have forgotten the 'be civil'
aspect of HN. <http://ycombinator.com/newsguidelines.html>

Feel free to bring the issue up again when you see ducks and poker in the
latest FPS.

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taylorbuley
If Facebook was banking on expectations that they'd see a 30% cut of Zynga's
revenue this does not bode well for a Facebook IPO.

~~~
sirclueless
Sure it does, Zynga's revenue increased over the same period.

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taylorbuley
Short term, yeah. But Facebook needs its ecosystem to be healthy too. That
said, you're correct -- I conflated "profits" and "revenue" and shouldn't
have.

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loevborg
Is it just me or is it meaningless that profits are down by a certain
percentage? Suppose a company is just about breaking even. Last quarter it
made $1,000,000 (of a revenue of $100M). This quarter it makes $1,000. Profits
fell 99.9%. So what?

~~~
jarek
It no longer made as much money to be redistributed to shareholders or
invested in future growth. To be sure, it depends on _why_ the difference
between expenses and revenue rose by $999k.

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analyst74
judging a gaming company by quarter?? ok, zynga is not exactly a traditional
gaming company, but can you even imagine if we judged blizzard or bioware
(when they were independant) by quaterly figures?

~~~
Impossible
Publicly traded game companies are judged by quarterly figures... In the case
of Blizzard and Bioware, Activision and EA stock are hugely affected by their
revenues. Its not right, and it leads to games being shipped too early to
attempt to improve quarterly revenues (I worked on a THQ project where this
happened), but it happens all the time.

~~~
palish
There's no reason we should tolerate that.

(I'm a gamedev, not a player.)

~~~
ido
What can you do about it?

~~~
palish
Nothing. The world is as it is. I've come to accept that.

But -- here's the thing -- your moral/ethical compass shouldn't be influenced
on account of the world. Think back through history, and at every point,
people have been essentially crazy. So the only thing we can do is to have the
confidence to know "what's good", and then strive to make our personal lives
reflect that. (Without becoming judgmental of others. </irony>)

If you're asking what _I'm_ going to do about it, well... I'm just like
everyone else. I train myself for years in every aspect of game development,
am building an entire multiplayer game from start to finish without relying on
anything except my creativity and capabilities, and will be done around age
39. :) Then I'll use the proceeds to form a company and hire a few likeminded
people.

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SJDave
Zynga's having a hard time getting new players, according to this -
[http://blogs.reuters.com/mediafile/2011/09/27/zynga-
herding-...](http://blogs.reuters.com/mediafile/2011/09/27/zynga-herding-its-
users-like-sheep-from-game-to-game-data/)

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c_raig
"Zynga has reported year on year profits that were down by approximately 95%"

"Zynga's total revenues for the quarter were up by 15%, though this was slower
growth than the previous quarter, which jumped up by 24%"

Perhaps it's just a little too early to handle basic concepts, but if revenues
are up, but profits are down, doesn't that just mean costs are significantly
greater? Isn't THAT the big headline here?

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zitterbewegung
I guess the real question is this indicative of a general trend or is this
only a one time event? Does this bode well for people who want to write apps
for Facebook?

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joshuaelu
Does anyone know what Zynga did Q3 2010? Doesn't really make sense to measure
profitability in succeeding quarters as it does to look at the YoY, right?

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michaelochurch
The electronic games field is currently flooded with a bunch of one-trick
pranksters and bike-shedding assclowns and "gameification experts" who haven't
designed a game and flat-out have no clue what they're talking about. I
thought the domination of Corporate (post-3D) was the death of decency in
electronic gaming, but this "social" dreck makes EArts at its worst look
saintly.

If Zynga can reinvent itself as a company that gives a shit about game
quality, then I'll cheer for their success. What they represent now is
something of which I can whole-heartedly say that I'm glad to see any signs
that it's starting to die.

In 1995, _Chrono Trigger_ (a game built by a team of leading artists and
designers, not based on "analytics" regarding how to sap the energy and
attention of half-bored people) came out. It had a story, there was a sense of
progress because the game kept evolving and the challenges got harder (imagine
this!) and after 50 hours or so, the game was completed and you went the fuck
outside and rode your bike or went swimming. You could New Game+ to beat Lavos
at different points in the story and level up to 99 if you _really_ cared, but
that was pretty rare and even then, the game came to a close. Also, the game
involved a lot more thought than the mindless click-here-click-there of these
Games For Idiots like _Shartville_ and _Mafia Whores_.

~~~
estel
Is there a problem with having diversity in the market? Whilst I can always
wish that every development studio were developing games to suit my needs and
tastes; obviously it's far better that there are a range of studios producing
a range of titles, a large number of which I won't like. I might not enjoy the
games that Zynga produce, but it seems pretty clear that there are plenty of
people out there that do enjoy them very much; and I'm not sure that more
people "playing" generally is a bad thing.

More people playing more games from more companies is only ever going to be a
good thing for the industry.

~~~
kalid
My feelings on this are hard to put into words -- Zynga is the equivalent of
churning out crappy romance novels, soulless pop music, kitsch art, or even
junk food (made to be addictive, incidentally "nutritious").

"Art" is undefinable, but one heuristic is something genuinely meant to evoke
feelings in the audience and perhaps teach them something as a result.

For me, it comes down to intent. Zynga & friends are building "compulsion
loops" which aren't meant to entertain, they're meant to addict. I don't have
a problem with a diversity of games, everyone has different tastes, etc.
but... some things just feel skeevy.

