Zynga Inc. (NASDAQ: ZNGA) Revenue Drops Despite Innovations

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By Chris Hillman on August 11, 2014 Technology & Software

With countless social games available on numerous social networking sites, Zynga Inc. (NASDAQ: ZNGA) is famous for their innovative and detailed provision of online games. Nowadays with excessive activity over social media, it is indeed genius to launch captivating games. Nonetheless this lucrative idea has not been sailing too well. The company decided to expand their genre by creating more sports related games in lieu of excavating higher profits. However, even that idea does not seem to be doing Zynga Inc. (NASDAQ: ZNGA) any favors as the shares were down by 2.4 percent. Due to this, the company’s revenue dropped from $230.7 million to $153.2 million annually. After the year end, Zynga Inc. (NASDAQ: ZNGA) only possessed $1.149 billion which was quite a staggering drop from $1.541 billion.

As per the assertion of CEO Don Mattrick, improvements to somehow make the company grow sturdier were underway. He also mentioned how it was imperative to foster a company whilst recognizing its potential in order to truly prosper. The CEO also showed concern over enhancing the financial results of Zynga Inc. (NASDAQ: ZNGA) so as to attain maximum profits from shares and maintain their shareholders’ contentment. However as per the forecasted financial activities, analysts are of the view that Zynga Inc. (NASDAQ: ZNGA) might not be able to achieve what it has been promising.

Initially, the company had plans reaching almost $810 million worth of bookings. Disappointingly enough, the amount has been predicted to stay within the $695 to $725 million bracket, which is indeed a setback. The expected revenue by Zynga Inc. (NASDAQ: ZNGA) is forecasted between the amount of $160 to $170 million at the back of the company’s bookings and share prices. After some deliberation, it was established that the company was relying too heavily on one of the social media sits, Facebook Inc. (NASDAQ: FB). It was further realized that the amount of monthly active users for Zynga Inc.’s (NASDAQ: ZNGA) games had also decreased from 187 million to 130 million. Even though this number showed an upward, rising trend, this was still not perceived as success.

In order to persuade customers, Zynga Inc. (NASDAQ: ZNGA) announced that they will now begin developing NFL related sports games and signed a special contract with Tiger Woods to verify this idea. To please their fans and raise their anticipated reactions, the company also said that these games will be launched before the commencement of NFL season. Chief Operating Officer, Clive Downie, seemed quite optimistic about the company’s choice of sports sponsor in the form of Tiger Woods. He mentioned how well renowned sports idols would always entice the customers more, which is why it needs to be thoroughly planned. The sport icon would appeal to the common customer more and he would want to play the games developed by Zynga Inc. (NASDAQ: ZNGA).

Nonetheless, the company further announced another ingenious marketing idea to attain soaring high results by publicizing its deal with Warner Bros. Zynga Inc. (NASDAQ: ZNGA) is developing a game based on Looney Tunes to lure more customers in and somehow achieve its former glory.