Bad news for Zynga, the maker of games like FarmVille and CityVille, and maybe some bad news for Facebook buried in there as well. Zynga’s stock price is kind of collapsing, falling under $5 a share.
Daily active use for Zynga’s social gaming dropped 8.2 percent in May, said Doug Creutz, an analyst at Cowen in San Francisco, in a report today. Facebook accounts for most of sales and takes a cut of virtual goods sold in Zynga games, such as crops and tractor equipment in “Farmville.” While Zynga is the dominant provider of games on Facebook, it faces significantly more competition on smartphones and tablets.
The reason? Mobile. If people want to play games, they’re playing them on mobile devices (remember: smartphone adoption is soaring) where the games are much better and more fun than anything Zynga offers. You want to take care of a make believe cow or do you want to play Angry Birds Space? Exactly.
I’ve been saying for years that Zynga was walking a tightrope: the games are addictive but they’re pretty lousy games and the addiction wears off. Unless Zynga can get its customers hooked on the next game right away, the company is sunk. Well, maybe it’s sinking now.
And it’s one more reason not to go to Facebook on the web (where all the money for Facebook is with ads) and just use Facebook on the mobile device you’re playing games on (where all the money isn’t).