Zynga Inc(NASDAQ:ZNGA) may be struggling and planning
to reduce its studios and games in order to pare costs, but its biggest partner
and ally Facebook still has faith in the company, which developed social game
`Farmville' for it.
A senior Facebook Inc(NASDAQ:FB) executive told some
members of the media on Thursday that though the company was going through a
struggle, it still reposed confidence in it.
While announcing Facebook's
quarterly results earlier this week, Facebook chief Executive and founder
Mark Zuckerberg had revealed that its revenues from Zynga had slid 20 percent.
Zynga appears to have lost the plot somewhere and is
floundering.
The company has decided to lay off more than 100
employees and close its Boston office, with more closures possibly on the way.
Zynga will also phase out 13 games. While no list has
been announced, the sleuths at sister site Inside Social Games examined Zynga’s
worst-performing games, exploring possibilities for sunsetting, AllFacebook
site reported.
At an interaction with some select journalists
Facebook's director of games partnerships Sean Ryan said, "Zynga will come
back. They’ve got great games; they are a great partner for us."
Earlier Zuckerberg had said of the gaming ecosystem,
"Overall, gaming on Facebook isn’t doing as well as I’d like, but the
reality is that there are actually two different stories playing out here. On
the one hand, our Payments revenue from Zynga decreased by 20% this quarter
compared to last year. But the interesting thing is that the rest of the Games
ecosystem has actually been growing. Our monthly Payments revenue from the rest
of the ecosystem increased 40% over the past year since Payments has been
adopted. This evolution is pretty encouraging."
Shares of ZNGA rose over 12% in Thursday’s session
after the company posted
better than estimated revenue.
Other Facebook executives downplayed the implications
of Zuckerberg's comments.
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