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Zynga issues second earnings warning

Not a zinger
Fri Oct 05 2012, 13:27
No Money

ONLINE GAMES COMPANY Zynga has cut its earnings outlook for the second time this year, prompting speculation that it is floundering and losing players.

In a note the firm revisits its tough year and its apparent inability to dissuade people from stopping playing once popular titles like Farmville and Cityville.

However, according to the man behind the note these are short term challenges that can be overcome with a little determination and an increase in people playing games.

"The third quarter of 2012 continued to be challenging and, while many of our games performed to plan, as a whole we did not execute to our satisfaction. We're addressing these near-term challenges by implementing targeted cost reductions in the fourth quarter and rationalizing our product R&D pipeline to reflect our strategic priorities. At the same time, we are continuing to invest in our mobile business where we have one of the strongest positions in the industry," said Zynga founder and CEO Mark Pincus.

"These actions support our strategy to transition from being a first party web game developer to a multiplatform game network. We remain optimistic about the opportunity for social gaming and the power of our player network of 311 million monthly active users."

Zynga bought OMGPOP earlier this year when people were still excited about playing its Draw Something game. People are less interested in playing that game now, and Zynga is taking the loss of popularity on the chin.

Zynga is due to report quarterly results at the end of October, when it expects to report a net loss of between $90m to $105m. µ

 

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