Social gaming company Zynga Inc.’s (NASDAQ: ZNGA) FarmVille became so popular after its launch on Facebook’s (NASDAQ: FB) platform that it threatened bigger and well established rivals in the gaming industry; nonetheless, it began to struggle after the advent of Apple Inc.’s (NASDAQ: AAPL) iPad as more and more users started to play games on smartphones.
As mobile platforms were preferred over the Facebook platform and personal computers, Zynga’s revenue growth started to spiral downwards; and, so was its stock price which was hammered even though it released dozens of games.
Accordingly, the Company in order to turn its fortune introduced “FarmVille” sequel on Wednesday.
The sequel is totally different from FarmVille 1version. While FarmVille had two dimensional figures, FarmVille 2 will have lush 3-D graphics.
Not only that, the game itself has added new element as well. In FarmVille 2, players will be able to interact with charming cartoon animals. In the earlier version, players could only “harvest” with them by endlessly clicking to gather coins.
According to Zynga, based on users demand, the new version will have more collaboration among players/farmers instead of competition. Also, the creators are expecting that FarmVille 2 –which consists of sweet nature sounds –will bring in relaxation and nostalgia to users, something not provided by most shooting videogames.
The Rise and Fall of Zynga
Zynga, after making an impressive debut and becoming household name, struggled to maintain investors’ trust as investors questioned its business model. Its stock slid nearly 70% since it made its IPO in December 2011 as users switched to iPads and smartphones even as company did not embark on mobile platform. On the other hand, most gamers on Facebook use mobile phones.
Since Zynga stuck to Facebook platform, it started losing its market share to rivals as market dynamics was changing gradually. For instance, iPad wasn’t launched until 2010 and smartphones were not used widely either. According to Pew Internet & American Life Project, while only 35% Americans used smartphones in 2011, in 2012 the number went up to 46%. Besides, majority of gamers on Facebook use mobile phones.
Amid falling popularity and users, shares started to plunge. While it launched itself with IPO price of $10 in December, on Wednesday it traded at $2.92– only26 cents above its all-time low of $2.66.
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