Share prices of Zynga Inc., the largest producer of social games on Facebook, fell to a record low recently.
Customers are thought to be actively switching to mobile phones because it is so convenient to play the games anywhere and any place. Also the quality of the games is as good, if not better, when played on mobile phones.
It is thought that this increased usage of mobile devices such as smart-phones is the main reason for the drop in revenue. Less revenue is generated from these than from customers who use a standard computer to play the games.
An excerpt from a recent article:
Shares of San Francisco-based Zynga decreased 10 percent to $4.98 at the close in New York, the lowest price since the company sold shares at $10 apiece in an initial public offering in December. Through yesterday, the stock had dropped 41 percent this year.
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.
You can see the full article here: Zynga use declines, causing stock to fall to record low
About the Author: Brian Daly
From Ireland, the land of saints and scholars, and U2 :)
I have various interests and hobbies, but and most of them seem to be internet-related. Involved with computers and internet most of my career, and my very first computer was a 386, with a 20 Meg hard and 640 K RAM (huge in those days but dismal now). Those were the days when we built computers out of cast-iron :)
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