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Since their revenue was up, this doesn't mean much without knowing more about "higher than normal spend on hiring, acquisitions and international growth."

robryan 15y ago
Yeah, if anything it says they are confident enough in their business to reinvest nearly all of their revenue and not just go for a quick win.
scottkduncan 15y ago
Well their daily active users were down despite hiring and acquisitions. Pre-IPO, I would say that a declining user-base is not a selling point for a social company.
- robryan 15y ago
  Could this just be a gap in between new games? Zynga games do seem to be sticky and addictive but there is going to be a lot of attrition the longer a game is around.
  - scottkduncan 15y ago
    Yes, I imagine that could definitely have something to do with it. I also think part of it is that others (Sims Social) have shown they can build sticky and addictive games as well and Zynga is no longer the sole owner of the space.
  - whopa 15y ago
    Most of Zynga's games differ only very superficially though. It's weird that they can't launch games fast enough to stave off attrition.
- schraeds 15y ago
  Let's be clear, active users were down only 4%.
  - jstanderfer 15y ago
    If they were already public, this would likely cause a huge drop in the stock price. Similar to what happened to Netflix when they guided down on number of subscribers.
    - Joakal 15y ago
      Netflix had bad publicity surrounding price increases. Did Zynga do anything to cause the user base to decline?
      - jstanderfer 15y ago
        When you've sold yourself as a growth story, the reasons for the decline don't matter to Wall Street. Sell side analysts build complex earnings projections models based on estimated compounding growth rates. Even a slight reduction in the growth rate has a large impact on projected earnings a few years out and a negative growth rate blows up the entire model.
        deleted 15y ago
        [deleted]
      - SwellJoe 15y ago
        Did Zynga do anything to cause the user base to decline? You mean, other than being evil incarnate?

robryan 15y ago

Yeah, if anything it says they are confident enough in their business to reinvest nearly all of their revenue and not just go for a quick win.

scottkduncan 15y ago

Well their daily active users were down despite hiring and acquisitions. Pre-IPO, I would say that a declining user-base is not a selling point for a social company.

robryan 15y ago
Could this just be a gap in between new games? Zynga games do seem to be sticky and addictive but there is going to be a lot of attrition the longer a game is around.
- scottkduncan 15y ago
  Yes, I imagine that could definitely have something to do with it. I also think part of it is that others (Sims Social) have shown they can build sticky and addictive games as well and Zynga is no longer the sole owner of the space.
- whopa 15y ago
  Most of Zynga's games differ only very superficially though. It's weird that they can't launch games fast enough to stave off attrition.
schraeds 15y ago
Let's be clear, active users were down only 4%.
- jstanderfer 15y ago
  If they were already public, this would likely cause a huge drop in the stock price. Similar to what happened to Netflix when they guided down on number of subscribers.
  - Joakal 15y ago
    Netflix had bad publicity surrounding price increases. Did Zynga do anything to cause the user base to decline?
    - jstanderfer 15y ago
      When you've sold yourself as a growth story, the reasons for the decline don't matter to Wall Street. Sell side analysts build complex earnings projections models based on estimated compounding growth rates. Even a slight reduction in the growth rate has a large impact on projected earnings a few years out and a negative growth rate blows up the entire model.
      - deleted 15y ago
        [deleted]
    - SwellJoe 15y ago
      Did Zynga do anything to cause the user base to decline? You mean, other than being evil incarnate?