Friday, October 26, 2012

Facebook Inc (NASDAQ:FB) comes out in support of struggling Zynga Inc (NASDAQ:ZNGA)

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.

No comments:

Post a Comment

Privacy Policy | Legal Disclaimer