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FarmVille creator Zynga reports loss in second quarter

Nancy Marshall-Genzer Jul 26, 2012
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FarmVille creator Zynga reports loss in second quarter

Nancy Marshall-Genzer Jul 26, 2012
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Jeff Horwich: Yesterday after markets closed we got results from Zynga, the maker of Facebook games like FarmVille. And things ain’t looking so good down on the farm.

Here’s Marketplace’s Nancy Marshall-Genzer.


Nancy Marshall-Genzer: Zynga went public at the end of last year. But since then, the company has lost almost 70 percent of its value. What’s going on?

Michael Pachter is a research analyst at Wedbush Securities. He says Zynga has cannibalized established moneymakers like FarmVille with new games.

Michael Pachter: They’ve probably drawn away some of the paying users from older games like FarmVille and CityVille and those people are probably spending less money on their newer games.

Most of Zynga’s games are free. The company makes money by selling virtual products — like tractors on FarmVille. So, is it time to sell the farm?

Scott Steinberg: I wouldn’t say it’s time to foreclose on FarmVille just yet.

Scott Steinberg heads Tech Savvy Global. He says until recently, you could only play Zynga games on Facebook. Now, Zynga hopes to break away. It’s also developing social gaming on mobile phones.

Steinberg: There’s a potentially huge play there and I think Zynga’s going to be well poised to capitalize on that.

Steinberg says Zynga’s grim earnings are just a blip on the radar.

In Washington, I’m Nancy Marshall-Genzer for Marketplace.

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