Finally, Zynga Gets a Serious Competitor

Zynga remains one of the best-positioned businesses I've seen. But its edge may be eroding. Don Reisinger over at News.com did some digging, and found that The Sims Social from Electronic Arts (Nasdaq: ERTS  ) is catching on with Facebook users in Zynga-like fashion.

Launched two weeks ago, Sims Social already has more than 23 million active users, according to its Facebook page. While that's short of Zynga's Empires & Allies, which attracted some 40 million players in the weeks after its launch, it's still an impressive showing.

EA may also be making history. Its launch of Sims Social marks the first time a developer other than Zynga has so quickly captured the attention of Facebook players. Expect Activision Blizzard (Nasdaq: ATVI  ) and Take-Two Interactive (Nasdaq: TTWO  ) to draw some lessons from this.

Take-Two, in particular, has a small following and average rating for CivWorld. Surprised? I was. Sid Meier's Civilization series has been a popular board and PC game for decades. Facebook success seemed all but assured at launch. So far, that hasn't been the case.

In this sense, CivWorld is just like most Facebook games: played by a small but loyal handful, and otherwise ignored. EA knows the feeling, having endured this malaise with Madden NFL Superstars. That game has yet to cross the million-player threshold despite the franchise's popularity with console gamers.

The implication? Facebook success is neither formulaic nor guaranteed. Perhaps Zynga's moat is wider than any of us imagine? Weigh in using the comments box below. You can also keep tabs on the social gaming movement by adding these stocks to your watchlist:

The Motley Fool owns shares of Take-Two Interactive Software and Activision Blizzard. The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Take-Two Interactive Software and Activision Blizzard. Motley Fool newsletter services have recommended creating a synthetic long position in Activision Blizzard. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 01, 2011, at 11:20 AM, TMFBiggles wrote:

    The problem with CivWorld is it completely failed to capture the sense of empire-building that was at the heart of the old Civ games. You just can't shoehorn a game of incredible depth into a medium that's designed for very shallow gameplay and expect a smashing success.

    Games that do well in the Facebook medium are usually easy games that reward activity instead of skill and give players an opportunity to show off. That's where Zynga's done well and this is a perfect setting for Sims Social, but it's a poor place to transplant successful console/PC games with rabid followings, since the design philosophy for success is very different.

    I tried both CivWorld and Sims Social (anything to weasel out of work!) and found CivWorld so uninteresting that I removed it within two days. I didn't mind Sims Social, but I hate having to publicly beg for assistance to build myself a new couch or buy a better barbecue. I can definitely see ERTS pulling in a lot of revenue from the game, though.

    By the way, the best place I've found to track user data on Facebook games is here:

    http://appdata.com/?utm_source=ISG&utm_medium=logo&u...

  • Report this Comment On September 01, 2011, at 9:40 PM, jacobandersen72 wrote:

    i am completely ashamed of Zynga.

    it is shameful to call them a game company.

    they make Tamagotchi's that rape older women of their money.

    i will be so thrilled to see the real game companies do whatever is necessary to push them out of the business.

    zynga sucks. I am a console game coder. I would never work for them. ever.

  • Report this Comment On September 01, 2011, at 9:44 PM, jacobandersen72 wrote:

    bobby kotick of Activision is sleeping on this one. he is probably looking to buy a big company but cant find anything to buy. the guy buys more than builds. meanwhile ATVI stock keeps falling lower and lower.

    Developer Leaderboard

    Rank By: MAU|DAU|DAU/MAU

    1. Zynga 276,302,091

    2. Electronic Arts 51,476,987

    3. Microsoft 50,432,553

    4. Mensing 49,850,809

    5. wooga 36,995,052

    6. Playdom 33,924,978

    7. RootMusic 32,500,434

    8. 21 questions 28,351,187

    9. Yahoo! 22,868,544

    10. CrowdStar 21,845,329

    11. 6waves Lolapps 20,003,936

    12. Friskylabs 19,362,421

    13. Takeoff Monkey 19,130,360

    14. Zoosk 18,425,327

    15. Social Point 17,403,990

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