Zynga Inc (NASDAQ:ZNGA) Falls Sharply
The biggest challenge in the online gaming arena is the short shelf life of the product. Consumers are on the look for something new to amuse them each passing day. This is why the critical success factor for online game makers is innovation and continuous redevelopment. That’s something even the hardest players like Zynga Inc (NASDAQ:ZNGA) will need in the year ahead.
With the gloomy expectations for a disappointing quarter ahead, analyst firm Sterne Agee slashed the company’s rating to Neutral. Analyst at Sterne Agee, the decline in sales and user base of the online game maker will continue till at least Q1 of 2014. The company is due to announce its Q4, 2013 results and 2014 expectation today. Quarterly bookings will also see a 50% decline (year over year), Sterne Agee’s analyst report said.
Revenues Decline As Users Move Away
The last year has been a tougher year for Facebook game seller, Zynga Inc (NASDAQ:ZNGA) as the game developer saw a shrinkage of its user base to merely 50% of where it stood in 2012. Only 150 million users were enthused by the offers of the game maker unveiled during 2013. During 2012 the user base stood at 300 million. The decline in users made a huge impact on financials. The gross revenues for 2012 were only $1.2 billion.
Most of the games by the company, faced resistance with their fame fading away against competitors offerings, except the most talked about Farmville, Farmville 2 and Zynga Poker.
Online Gambles Could Be A Potential Upside
After a challenging FY 2013, Facebook game seller, Zynga Inc (NASDAQ:ZNGA) might see a rash year ahead. The biggest prospect yet to be realized by Zynga Inc (NASDAQ:ZNGA) is the revenues from real money gambling games. As such the company’s online gambles, Zynga branded “PlusPoker” and “PlusCasino” are just touching the UK market. However, with the global online gambling market growing from $30 million to $36 million there is much more to unleash for the company.