Zynga’s CEO Mattrick Sees The Light At The End Of The Tunnel In 2015
Social gaming giant Zynga has got to be one of the enigmas in the gaming fraternity. The epic rise at the time of their 2011 IPO launch to their colossal collapse in the last few years has got both potential investors and shareholders guessing.
To call their last few years a roller coaster ride would be the understatement of the year. The reasons for their downfall have not been a mystery as former CEO Mark Pincus admitted that he missed the ball completely when he focused too much on web and not enough on mobile. With a share price that has lost 70 percent from its IPO launch the new CEO Don Mattrick has been a controversial figure.
Some believe he could well be the man to save the struggling gaming giant’s fortunes but others believe he is just prolonging the demise of a once dominant player in the gaming industry. While CEO Mattrick has on previous occasions explained his long term recovery plans for Zynga, many believe he is running out of opportunities to show that he can turn Zynga round.
This week saw one again epitomized the notion that success is in the eyes the beholder. Zynga announced weaker 2nd quarter earnings as well as slashing their 2014 forecasts. The reasons for the revised weaker forecast include the delay of the launch of the newly revamped Zynga Poker, Needless to say investors were impressed and the share dropped as low as 9 percent on Thursday following the announcement.
Mattrick again tried to defend the company’s decision to delay releases by claiming it was in the best interest of Zynga. He said,” Moving revenue is on one hand is clearly discouraging ….but we are being consistent against our lens of medium- to long-term choices for the benefit of customers and shareholders,” A major red light for investors is the fact that Zynga’s active monthly players have dropped from 187 million in last year’s second quarter to 130 million this second quarter.
While delaying titles like” Words with Friends” and mobile games from their earlier acquisition of Natural Motion there was some good news coming out of Zynga. They have entered into a licensing deal with the NFL in which they will release a mobile football games titled NFL Shutdown in certain countries. This is significant as it marks the first time Zynga releases a sporting title, Zynga’s revises 2014 bookings are now between $695-$725m compared to their previous $770-$810m.
Ever the optimist CEO Mattrick is asking investors to hang in there as better times are coming. He just about pleaded and was quoted as saying.” The majority of benefit is going to come in 2015.”