Learn more about what comes next. One of the consequences is that some of the investors who invested in February are underwater. What could have caused such a precipitous change in fortunes in just a matter of months? Here are a few possible explanations:. We may collect cookies and other personal information from your interaction with our website. For more information on the categories of personal information we collect and the purposes we use them for, please view our Notice at Collection.
In , the company released its popular puzzle game Words with Friends. It also debuted FarmVille a farming simulation game on Facebook and later through its own browser-based portal.
The game went on to be a huge hit, launch one of Zynga's most important franchises, and provide a framework from which many of the company's future games would be built. It's worth noting that the gameplay and visuals of both Mafia Wars and FarmVille were largely derivative of games from other developers, and Words With Friends is similar to the popular board game Scrabble.
The next year saw the company release CityVille , which went on to surpass FarmVille in popularity. By this time, Zynga was the most successful app developer on Facebook's platform and it had built a stable of successful properties, but cracks in its business were already forming due to tensions with Facebook over monetization schemes and the rising popularity of apps that ran on mobile and PC operating systems rather than browser portals. It's been mostly downhill since then.
These shifts caught Zynga flatfooted and resulted in substantial and prolonged revenue declines. Mark Pincus left the company in following a string of disappointing releases and acquisitions and was replaced as CEO by Don Mattrick -- who had previously spearheaded Microsoft 's Xbox and Xbox One. Mattrick proceeded with the goal of speeding Zynga's transition to mobile, but his tenure would ultimately be defined by a poorly received update to Zynga Poker and a costly, underperforming acquisition.
He stepped down in and was replaced by Pincus. This was also not to last, as Pincus left the chief executive role again in and was succeeded by current CEO, and former Electronic Arts mobile executive, Frank Gibeau. Under Gibeau, the company is focusing on quickly reaching profitability by increasing monetization from its core games rather than devoting lots of resources to developing the next big mobile hit.
So far, Wall Street seems to be liking the new approach. The company is also looking to grow engagement and sales from its Words with Friends and Slots franchises on mobile. Keeping costs down and generating more sales from existing user bases across these two properties look to be achievable goals in the short term, but whether the company can deliver wins for long-term shareholders will likely hinge on its ability to grow its audience through the release of new hit games.
Zynga's performance could be a significant marker for an oft-times balky tech IPO market. LinkedIn's IPO earlier this year was successful, but shares of discount-deals site Groupon and Internet radio service Pandora sputtered after the companies went public.
No matter how its shares do, Zynga still faces questions about its long-term business prospects and its ability to innovate. Zynga's management team, led by CEO Mark Pincus, has told investors in road show presentations that the company is working on its biggest-ever pipeline of games.
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