Zynga's latest game, "Mountain Goat Mountain," encourages players to "always be climbing." Image source: blog.zynga.com

What: Shares of mobile game creator Zynga, Inc. (NASDAQ:ZNGA) fell 13.3% in July, according to S&P Capital I.Q. data.

So what: While there wasn't a single driving news catalyst during the month, Zynga's fall can be attributed to two factors. The first is continued investor skepticism that the company has a viable path to revenue growth. This concern is deeply rooted and can be traced all the way back to Zynga's IPO and the company's former overreliance on the FarmVille franchise:

ZNGA Chart

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Investor nervousness in anticipation of earnings released in early August provided the second source of pressure on Zynga stock during the month. The second-quarter earnings report covered the first full quarter of founder Mark Pincus' return to the helm of the gaming company. Pincus had announced a number of changes after retaking the CEO position, including a $100 million cost-reduction initiative, and a trimming of the number of gaming categories the company would seek to compete in. Going forward, Zynga will offer titles only in the Action Strategy, Social Casino, Invest & Express, Casual, and Racing themes.

Now what: Zynga released Q2 2015 earnings on Aug. 6. The company reported bookings of $174 million during the quarter, above the top end of management's previous guidance range of $145 million to $160 million. Executives attributed the expansion in bookings partially to the increase in mobile gaming, which rose 30% year over year, propelled by the titles Slots, FarmVille: Harvest Swap, and the recently released Empires and Allies.

Zynga's transition to a mobile-gaming company was the greatest contribution of former CEO Don Mattrick, and management continues to pour resources into this area. Games played on mobile devices provided 66% of total bookings during the quarter. Investors who have held concerns over Zynga's long-term viability may be able to breathe a bit easier, as it captures more share in a market that by some estimates will reach $30.3 billion by the end of this year.

CEO Pincus also reported progress in the company's $100 million cost-reduction plan, and as a result, Zynga was able to book positive free cash flow of $1.1 million for the quarter. While this may not seem significant considering the company's total revenue of $200 million, consider that in the previous sequential quarter, Zynga suffered negative free cash flow of $49.1 million.

Investors appeared to react positively to these and other signs that Zynga is making slow but surefooted progress. A day after the earnings release, Zynga stock gained nearly 8%, and so far this month, it's recaptured nearly half of the midsummer swoon it saw in July.