Zynga Attempts Recovery through Mobile Gaming
The popular online game developer, Zynga Inc, has chosen to shift its focus to mobile games and will be developing a network that connects multiple mobile game players.
Recently the company has been finding it difficult to generate business as its user base on Facebook has rapidly shrunk. In the second quarter of this year the number of Zynga users dropped 16% to 141 million, the decline is thought to be the direct result of gamers shifting to mobile devices.
Zynga has been offering free games on Facebook since 2008 and earns money when gamers purchase virtual goods through the games. The company grew massively and was valued at $20 billion during at its IPO. However, recently the company has been reporting losses and stock prices have dropped 73% since December.
However, there may be hope as the company claims its mobile gaming business is growing three times faster than the web gaming. Facebook users, which are still the biggest generator of revenue for Zynga, are also shifting to mobile devices with over 50% of Facebook users logging in through mobile devices.
The biggest challenge for Zynga is to find a way to connect a large audience across a number of platforms. At present Zynga has 20 games for iOS and 10 for Android. Last week David Ko, Zynga’s Chief Mobile Officer, held a meeting, which ended without a resolution, to discuss whether Zynga should charge users for downloading the games or offer them for free.
Only time will tell whether Zynga’s new strategy will work, but they are certainly facing an uphill battle. It is extremely hard to make money from the mobile platform, largely because the screens are smaller and have less room for adverts. Zynga also believes that mobile players are more casual and are less likely to pay for games than players who use computers.