Layoffs expected at Zygna as stock price plummets
Has the social gaming bubble burst? Zynga may arguably be the most recognisable name in the sector, being the stable responsible for CityVille and FarmVille, but have seen stocks hit all time lows.
Reports now put Zynga’s stock value at just $2.35 per share, down from a lofty 52-week high of $15.91. Zynga had told investors to brace for a fall, but the drop has been more significant than even they themselves had anticipated.
Numerous layoffs are now expected to offset the financial woes.
“The outlook for [the fourth quarter] is significantly lower than our expectations, which assumed some growth from newer titles launched this summer,” claims Doug Anmuth, J.P. Morgan analyst.
“We expect fundamentals to remain weak over the next few quarters as the company faces several headwinds.”
Zynga’s monetray problems have been multiplied by the acquisition of game developer OMGPOP. They bought the Draw Something team for $180 million, but admitted that as much as $95 million of that purchase will have to be written off following a decline in player numbers.
Among Zynga’s claimed problems are changes to the Facebook gaming changes, which favour new titles over long-established ones like Zynga’s franchises.
