As I was reading reports of the increasing skepticism about Zynga's
The real reason may lie in its "lack of originality" and the way Zynga has been to trying to sweep it under the carpet by displaying a voracious appetite for acquisitions ... which is why it's having a lot of explaining to do regarding the acquisition of Draw Something-maker OMGPOP. And that also relates to the 22 acquisitions made by the company within a span of 24 months through 2010 and 2011. The question is -- are these part of a deliberate strategy on the part of Zynga aimed at short-term gains, because seriously speaking, I don't see signs of long-term value addition in these.
It's been a long time since the Farmville days -- part of Zynga's brief tryst with originality. And now, its biggest acquisition to date is taking the flak as Draw Something's popularity chart shows a downward trend. While it's true that Draw Something was probably a good acquisition at the time, boasting of a record 50 million downloads within the initial 50 days of its launch, it's now facing the brunt of the fickle mentality of gamers so typical around the world.
From being the one-time highest grossing game on Apple's mobile app store, Draw Something has now been ranked 23rd in that order. But, what should be more worrying from Zynga's standpoint is that the game has now only about 7.6 million average users logging into it using Facebook on a daily basis. That's down from a daily high of 14.5 million when OMGPOP was acquired by Zynga.
It's not as if Zynga's not trying to do anything about its flagship game. The recent plans to tie up with Dreamworks Animation to put in additional advertising into Draw Something is perhaps one of the ways it's trying to address investor concerns. The target audience is also being expanded as Zynga plans to translate the game into as many as 10 languages. At the same time, Zynga is looking into the social aspect by enabling intra-player messaging within the game. The last bit may have come from the company recognizing that die-hard gaming and social networking may be difficult to gel, after all. Having said that, I certainly agree with analysts who feel that what Zynga really needs to do at the moment is not only add more users, but also figure out a way for them to actually pay up.
Zynga operates in a scenario where acquisitions seem to be the order of the day. Fellow game maker Electronic Arts
The recent explosive growth in mobile gaming might make that even more difficult given the fact that mobile users are highly unlikely to spend more or even play online games to a large extent, given the cost of data involved. If you ask me, they'd rather download it, which is why you should keep a safe distance from Zynga for now.
While Zynga has yet to figure out a way to capitalize on mobile-based gaming, there are a host of other companies that have successfully cashed in on the next trillion-dollar revolution. The report is completely free, just like this article, so check it out now while it's still available.