If Zynga added together all the news stories written about them over the past week or so they’d likely have more tanks than an impressive sized national army. That would be a good thing if they were talking about Zynga entering the war on terror. Sadly it’s all about those damned share prices and “tanking” is not what they want to hear.
Since releasing their latest set of results, for Q2 2012, the stocks “tanked” by as much as 40 percent in after hours trading and led them perilously close to dipping below $3. To put that into perspective it means the shares were, yesterday, clinging to just 30 percent of their December 2011 IPO price. Usually they cry loud enough and the shares fly back up as if given intravenous red bull. Unfortunately the market seems to have gotten wise to this though as the 40 percent after-hours drop occurred after their announcement that real-money gambling was coming in 2013.
The problem with this being one of the wolf cries is that real-money gambling is by no means the saviour for Zynga. Many have been bleating for some time that Zynga can enter the world of real-money gambling without anyone stopping them doing so. Their trouble will start when they realize that turning free-play gamblers into real-money gamblers is going to be a trifle tricky.
Monetizing users is something they’ve been struggling with even before entering the real-money world of gambling though. Statista’s latest chart of the day, which you can find here, shows that average bookings (revenues generated in a given period, regardless of whether they are recognized) have dipped from well over $2 to almost $1.50 in just 18 months. If that trend took place over as short a period of time as that, then real-money gambling could very easily go the same way.
Put simply you can compare Zynga to a drunken day out at a theme park. You get drunk to celebrate the start of the day but suddenly realize anything you ride on or do makes you sick. We’re not sure whether an Alka-Seltzer the next day will do the trick for Zynga though.