Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
December 8, 2016
arrowPress Releases

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Analyst: Zynga needs 'significant' number of new users to stay afloat
Analyst: Zynga needs 'significant' number of new users to stay afloat
January 18, 2012 | By Mike Rose

Analyst group Cowen and Company has stated that social games giant Zynga must continue to gain new users from new releases at a "significant rate" if it wants to keep its DAUs count afloat.

The group initiated coverage of Zynga's initial public offering with a 'Neutral' rating last month, noting that it had "significant concerns" regarding whether Zynga will be able to maintain its growth and justify the current valuation.

In the company's latest report, analyst Doug Creutz explained that Zynga's most recent releases, Hidden Chronicles and Scramble With Friends, have nowhere near achieved the success of past games from the company.

Facebook game Hidden Chronicles reached 710,000 DAUs in 12 days -- in comparison, both CastleVille and Empires & Allies from 2011 were well past 5 million DAUs at the same point.

Elsewhere, mobile title Scramble With Friends is "well outside" the top 20 rankings in Apple's App Store, said Creutz. He noted that, while both games have the potential to steadily grow in user numbers over time, "that has not been the general pattern for Zynga's launches over the past year."

As a result, Creutz suggested that Zynga must continue to add a significant number of new users from games released later this year if it wishes to keep its DAU count constant.

"The quarterly rate of DAU decline for Zynga's titles that are at least three months old has averaged 18.4 percent per quarter for the last two years," he explained.

"Assuming Zynga averages a 20 percent quarterly rate of decline for titles beyond their launch windows in 2012, the company must add 9-10 million DAUs per quarter from new games just to keep total DAUs constant."

Related Jobs

IndieBox — Orlando, Florida, United States

Director of Marketing
Sanzaru Games Inc.
Sanzaru Games Inc. — Foster City, California, United States

Texture Artist
Wargaming | BigWorld
Wargaming | BigWorld — Sydney, New South Wales, Australia

Senior C++ Software Engineers - Complex back-end server projects
Telltale Games
Telltale Games — San Rafael, California, United States

Character Artist

Loading Comments

loader image