Zynga, the maker of online games have experienced a huge drop in share value, showing that they rely on Facebook dramatically. Their shares tanked by 40% yesterday as Facebook made changes to their system to address ‘spamming concerns’.
Zynga’s older games got hit hard and the company said the unexpected loss was due to the weaker performance of existing games and changes at Facebook which is favouring the discovery of new games now.
The delayed release of The Ville didn’t help the company either. Surprisingly their original hit ‘Draw Something’ suffered in the second quarter, with reduced sales.
Zynga CEO Mark Pincus said that the company outlook for the rest of the year is positive as they move forward. They have also developed their own website to promote the games outside of Facebook. The plan is that they will experience more growth this way.
Kitguru says: A tough year ahead we think for Zynga.