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Zynga's Profit Decline is Proof That Social Games are a Fad, Proves that Benzinga's Louis Bedigian is Always Right


I don't mean to brag, but… Oh wait, I do.

Remember that editorial I wrote about Zynga's demise? It's already coming true.

Gamasutra (via Business Insider) reports that Zynga's year-on-year profits declined from $27.2 million to $1.3 million – a decline of roughly 95%!

How could this be, when everyone in the world tells us that social games are the future? Zynga doesn't have an explanation for that. But I'll give you one: they were wrong and I was right.

On the upside, Gamasutra says that Zynga's revenue continued to grow but at a slower pace. “The $279.1M it generated in its quarter ending June 30 was 15 percent higher than the $242.9M it saw in its March quarter,” Gamasutra's Frank Cifaldi wrote. “By comparison, March revenues were up 24 percent from those in the previous quarter.”

During the same quarter, daily active users (or DAUs for short) dropped 4%, going from 62 million to 59 million.

To be clear, Zynga is still a successful company. But its future is not set in stone as so many would have you believe.

But wait – that's not all. According to Gamasutra, Zynga's virtual goods were also down 4%. Hah! Again, I was right.

Now that you've verified the accuracy of my social gaming assessment, allow me to switch topics and ask all the Nintendo (NTDOY) investors out there a question: are you going to continue to pressure the Mario maker into doing something it will never do, or will you finally take my advice and realize that the console and handheld market – the market Nintendo is currently in – is where the biggest long-term profits reside?

Follow me @LouisBedigian

Posted-In: Business Insider Gamasutra Nintendo ZyngaEarnings News Success Stories Tech Best of Benzinga


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