YoVille Gets A Stay Of Execution As Game Acquisition Talks Between Big Viking Games And Zynga Continue
Popular casual social game YoVille, which has a dedicated following of players despite having long since passed its peak in terms of popularity, gets a stay of execution today as Zynga has informed players it won’t be closing March 31 as previously announced. Instead, it will remain open with no new closure date announced, as talks between Zynga and Big Viking Games, the company looking to… Read More
Under fresh leadership from new CEO Don Mattrick, Zynga has gone back to the drawing board on some of its biggest money-makers. Today, the company is unveiling upcoming revamped versions of Zynga Poker and Words With Friends along with a brand-new mobile-first version of its biggest hit FarmVille. It’s a critical time for Zynga, which is trying to revive momentum after losing out on mobile… Read More
Though only mentioned twice in King’s 108,000-word filing with the SEC, there’s one name that haunts the prospect of the company’s IPO: Zynga.
As soon as King’s filing hit SEC.gov, journalists and analysts were angling to draw a comparison with the maker of FarmVille, whose fortunes had reversed dramatically since Zynga went public in late 2011
Zynga provides a reasonable parallel with King. In addition to being one of a handful of recognizable names in the mobile gaming segment, the company had pursued a similar mission: To create an assembly line of hit games. Read more…
The folks at Zynga are out with their third annual Words With Friends Valentine’s Day survey, and have shared a handful of fun stats concerning the likes – and dislikes – of more than 11,300 players. If you’ve ever wished you knew more about the mystery gamers on the other side of the Words With Friends virtual game board, now’s your chance.
Centered around a Valentine’s theme, the third annual survey showcases “players’ passion for word rivalry, penchant for smooth talkers, and preferences for expressing their love,” according to a press release that recently reached our inbox. Out of 11,317 respondents, 63% noted that they “thrive on competition with their partner,” and almost one-third admitted to throwing a match on purpose when playing a game of Words With Friends against a loved one, according to the survey. Read more…
Zynga broke a lot of hearts when it announced it would be shutting down YoVille, a virtual world online game that’s been running since 2008. The game’s players have been building their simulated communities for many years now, but they only have until March to say goodbye. Unless, that is, YoVille’s original creator and his new game studio have their way.
Big Viking Games, which is headquartered in Toronto and counts Albert Lai as its other co-founder, is looking to acquire the YoVille property from Zynga to help it avoid an early grave. That’s something the community definitely seems to support. Right after the announcement, a petition popped up from YoVillians threatening to boycott all Zynga titles if the closure went through (the Facebook group currently has over 15,000 members) and there have been some surprisingly emotional responses to the decision posted not only on Facebook, but to YouTube as well.
There’s a good reason why Zynga was looking to shut down the property, however: It has only around 500,000 active users per month at this point, which is off tremendously from its roughly 20 million actives during its peak popularity. Zynga said that it made the decision based on a need to redirect time and energy to new games, rather than to maintaining some of its older ones.
Still, Big Viking sees a lot of value left in the property. Lai explained to me in an interview that the company is in advanced talks with Zynga to take over the game.
“YoVille’s a massive virtual world not unlike Second Life (but not “adult” in any way) that at its peak was one of Zynga’s top-3 money-makers, and far, far bigger than Second Life ever was in user base,” he said. “Mark Pincus is involved in getting it back to us at Big Viking.”
Pincus of course is a Zynga co-founder, and was the company’s CEO from its inception until July 2013, when Microsoft exec Don Mattrick took over the role. Pincus remains at Zynga as Chairman of its Board of Directors, however, and as Chief Product Officer of the gaming company. His support isn’t the only sign that Zynga prefers this outcome: Lai says the company has been “amazingly good” throughout the purchase discussion process.
“We’re in dialog with them right now and ironing out technical and legal issues,” he said about the state of negotiations. “We are hoping it will happen soon, but it’s hard to put a number on it. The game serves a huge community of players that rely on it daily, from elderly players that are homebound and find it an outlet to socialize and ‘walk around,’ kids finding an outlet and support group. Also Zynga is at a scale that makes it hard for them to give it the level of focus and TLC I think we are able to.”
Lai says that Big Viking thinks its telling that there were once tens of millions of users on YoVille. That reflects the fact that it fills a need, he said, one specifically aimed at “casual social community” rather than “hack and slash” or other types of game mechanics currently in vogue. He won’t talk about what kind of price might be in discussion, but notes that Big Viking has been “quietly building a small war chest over the past two years” for exactly this type of scenario.
For its part, Zynga isn’t commenting on any potential YoVille deal at this time, but if it does go through it’ll mark the first time the casual gaming giant has sold back one of its acquisitions. That could benefit all parties, too, since while the game’s audience has shrunk, it remains numerous and dedicated.
When it comes to analyzing Zynga‘s full-bodied earnings announcement from Thursday, it may be easiest to take a bird’s eye view
The San Francisco, Calif.-based gaming company announced extensive layoffs, a half-billion dollar acquisition and better-than-expected earnings — a feat that Zynga COO Clive Downie described as the company “turning a corner.”
“I think it is Zynga turning a corner,” he said. “It proved that we have a vision for the company going forward that’s backed by strategy from a content standpoint, it’s backed by strategy for driving efficiency, and it’s backed by strategy in terms of how we look to accelerate it with the acquisition.” Read more…
Zynga was full of surprises Thursday.
The social gaming company announced Q4 and year end financials on Thursday a full week ahead of schedule, but these numbers were somewhat overshadowed by an unexpected acquisition and plans for another round of layoffs
See also: Top 10 Most Amazing iPhone Puzzle Games
The layoffs, which will include more than 300 jobs (15% of the company’s workforce), comes just seven months after Zynga unexpectedly laid off more than 500 employees back in June. The company shut down three offices at the same time, and this round of layoffs will save the company “$33 to $35 million in pre-tax savings for 2014,” according to the company’s earnings release Read more…
Paired with the news of a big half-billion-dollar acquisition, Zynga is also laying off about 15 percent of its workforce, or about 314 employees.
This is part of a cost-reduction plan that is supposed to generate $33 million to $35 million in savings this year, excluding a $15 million to $17 million restructuring charge.
In an interview today, CEO Don Mattrick said these jobs would mostly come out of “infrastructure” areas and wouldn’t involve shutting down any individual studios.
Zynga has roughly 2,000 employees at a time when better-performing competitors lack anywhere near the same kind of headcount. Supercell, which sold half of itself for $1.53 billion last fall to Japanese carrier Softbank, currently has about 130 employees and was producing just shy of $200 million a quarter in revenue in the beginning of last year.
Since Mattrick took over the company from founding CEO Mark Pincus, Zynga has engaged in a series of layoffs, cut out middle layers of management and shut down poorly performing games. Last summer, the company let go of about 520 people, or 18 percent of its workforce.
Social gaming firm Zynga today plunged 12 percent in regular trading, following a warning by Sterne Agee’s Arvind Bhatia, which indicated that the market’s fourth-quarter consensus may be too optimistic. Shares fell by 49 cents to end the day at $3.54.
Also today, UBS lowered its rating on Zynga’s stock from hold to sell, indicating deteriorating confidence in the company’s business fundamentals. Summing simply: Zynga got wrecked today as outside investors threw shade all over it.
Zynga has had a textbook rough time as a public technology company, with an IPO followed by a dramatic rise in its value, followed by a precipitous decline, and now years in the doldrums.
According to BusinessWeek’s summation, investors expect Zynga to lose 4 cents per share on revenue of $183 million in the fourth quarter. If those projections are too strong, you begin to wonder what upside the company may have. A quick look at past earnings, and the loss expected, is on the back of decreased year-over-year revenues.
In the fourth quarter of 2012, Zynga had revenue of $331 million.
Zynga has not been quiet. The company has a new CEO and changed its leadership structure in late 2013 to respond to its deteriorating condition. Still, it isn’t idle speculation to ask if those changes were less than what was required, and perhaps already over the event horizon.
The decline puts Zynga in an ironic position to excel: If it manages to merely meet the market’s consensus when it reports earnings, it could enjoy a firm bounce.
Top Image Credit: Flickr
Gaming giant Zynga has started to accept the cryptocurrency as a payment option for those buying tokens for virtual goods on the web versions of FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille. It makes Zynga the first major gaming company to accept Bitcoin.
Zynga posted the news first on Reddit rather than release an official announcement. It is calling this a “test” being run in partnership with BitPay — the startup backed by the likes of the Founders Fund and Li Ka-shing that is vying to be the “PayPal of the Bitcoin world.”
“We wanted to share with the r/bitcoin community that Zynga Inc. (NASDAQ: ZNGA) is now conducting a Bitcoin test with BitPay (https://bitpay.com/), a leading Bitcoin service provider, in select Zynga.com web games,” Zynga wrote in a post on Reddit.
“In response to Bitcoin’s rise in popularity around the world, Zynga, with help from BitPay, is testing expanded payment options for players to make in-game purchases using Bitcoin. The Bitcoin test is only available to Zynga.com players playing FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille. The games can be accessed at http://zynga.com.
“Zynga is always working to improve our customer experience by incorporating player feedback into our games. We look forward to hearing from our players about the Bitcoin test so we can continue in our efforts to provide the best possible gaming experience.”
We have tried buying tokens for the games ourselves and confirm that Bitcoin is coming up as an option in the UK — meaning that it’s likely that this is a global rollout.
We have reached out to Zynga to ask whether it plans to extend this to other games — namely those on mobile and its real-money gambling effort, currently live in the UK.
On the mobile front, considering that Zynga has a huge business on iOS devices, extending Bitcoin acceptance there could prove problematic, considering that Apple has recently shown that it does not support Bitcoin transactions.
Up to now, Bitcoin has not made much headway in the world of gaming, although it is seeing some traction in online gambling, where one Bitcoin-wielding player netted a $1.3 million win on one Bitcoin-based gambling site.
One of the attractive points about Bitcoin compared to more established currencies and payment platforms is that transaction fees tend to be lower than those of platforms that transact in more established currencies like dollars.
The deal is a nice coup for BitPay, which in December said it had processed $100 million in transactions in 2013. The startup has largely grown on the back of partnerships with merchants to process payments for things like electronics, precious metals, “and other low-margin products.” These merchants, the company has said, see “a large increase in profitability by accepting Bitcoin payments.”
That should come as good news for Zynga, which is focused on cutting costs while it grows revenues. The company was once a rising star with big social gaming hits like Farmville that people played via Facebook.
More recently, it’s fallen on harder times with a massive drop in users — its last quarterly report noted that daily active users were halved to 30 million compared to a year ago, with falling sales alongside that — as consumers flock to newer casual games and newer experiences from other publishers like King.com and Supercell.
The company has been trying hard to shore up its business and recover, appointing Microsoft veteran Don Mattrick as its CEO to replace founder Mark Pincus, laying off staff, and shuttering unprofitable games. In that vein, adding Bitcoin acceptance may not translate into billions more in sales, but it could give the company a little burnish of good PR among investors for being an early mover and innovator, as well as a boost of credibility among Bitcoiners who might come to play on the platform as a result.
(With thanks and H/T to Daniel Z.)