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What Happened to Zynga Games on Facebook?
After the IPO, Zynga’s stock price fell 40 percent. Moreover, it was rumored that Zynga had lost control of its Facebook presence, which in turn resulted in the infamous feud with Facebook. What happened to the game FarmVille? Was it simply a result of the feud or was there another reason? Read on to find out.
Zynga’s stock price plummeted by over 40 percent post-IPO
Despite its huge growth, Zynga’s stock price has plunged by more than 40% post-IPO. A recent earnings report highlights a range of factors that contributed to the company’s decline. This may interest you : How Do You Tag Someone on Facebook?. This includes softening mobile gaming markets, user privacy concerns, and loss of players due to COVID-19 restrictions. Here are the top three factors that contributed to the plunge.
In addition to misleading investors, Zynga has been accused of delaying the development of new games for its social media platforms and underrepresenting its growth. During the IPO, Zynga’s executives sold millions of shares before the company announced a drop in projected earnings. It’s also been alleged that Pincus, the former CEO of Microsoft’s Xbox division, failed to properly report the company’s growth. While it is unclear whether Pincus was aware of Zynga’s struggles, he did remain chairman of the company and has since sold over 70 million worth of shares.
But even in this scenario, the stock price of Zynga’s parent company Nexon has recovered by 230%, while the price of Zynga’s stock has plummeted by more than 40%. The company’s CEO, Sean Rad, is a Harvard graduate with a burgeoning business acumen. Zynga’s success is a matter of how fast it can innovate and grow while being profitable. The company has a strong core of technology, know-how, and momentum. Regardless of its size, Zynga’s survival depends on how well it can pivot to meet these demands.
Zynga’s feud with Facebook
When a company is dependent on a single service for its entire business, a feud with Facebook can seem illogical. But if Zynga can rely on Facebook for such a large chunk of its revenue, it should be OK. This may interest you : How Can I Contact Facebook?. After all, the company founded its game business on the idea that play would be the new core activity on the Internet. As such, its feud with Facebook makes it impossible to diversify the distribution point of its most popular games.
The feud between Facebook and Zynga has a more practical aspect, namely that Facebook forces smaller game makers to use their social network’s Credits, a currency that allows the companies to sell virtual goods. Facebook also takes a 30 percent cut of each transaction. Zynga then makes its money from selling items that speed up the progress of a game. While this is unfair to game makers, it is not without precedent.
FarmVille’s demise
The virtual farming game FarmVille made Facebook rich, propelling the company to a $9 billion valuation in 2011. The game has been the training ground for a generation of product managers and entrepreneurs. However, the social aspect of FarmVille has also been its downfall. Read also : How to Login Facebook Without Password and Mobile Number. While Facebook loved FarmVille, its users are disappointed with its lack of development. This will only add to the frustration.
But the downfall of FarmVille doesn’t mean the end of Zynga games on Facebook. The demise of this game isn’t necessarily the end of the world. The company is planning some in-game activities to reward users and entice new fans. In the meantime, a massive user base has been wiped out, with most people losing interest over the last few years.
Zynga’s ads tricked users into signing up for expensive mail-order products
A class action lawsuit alleges that social networking giant Zynga is defrauding its users. The lawsuit accuses the company of taking advantage of its users’ loyalty by advertising in its games and tricking them into signing up for expensive mail-order products or incurring unauthorized charges. The company makes close to one-third of its revenue through “commercial offers” on its website.
Many of Zynga’s players buy virtual goods, even if they have no intention of spending real money. The problem with the virtual goods business model is that people are naturally averse to risk. They may not get what they pay for, but they feel that the risk is minimal. In other words, Zynga’s games are akin to a virtual store. In order to make a profit, they require the user to spend money and are unlikely to spend it on something they would otherwise be interested in.
While Zynga has been successful in making games that are popular and ad-supported, its business model seems flimsy. Although Zynga’s Facebook games don’t earn much money, they have become a popular destination for gamers. In addition to its social aspect, Zynga has created a close-knit community by allowing players to share game points with friends and coworkers. This helps to foster a sense of community among users, which keeps them engaged in the game.
