Soon after its IPO, Zynga’s share price spiked above $15 in early 2012. Very little has gone right since then. Just last month, Zynga issued yet another warning and its share price now hovers just above $3. On Thursday, Zynga’s latest flagship game, Draw Something 2, dropped out of iPhone’s top-10 paid app chart after having spent only six days there. The original Draw Something spent nearly three months on the iPhone’s top-10 chart in early 2012.
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Zynga spent more than $200 million to buy game developer OMGPOP in March 2012. Four months later, Draw Something dropped out of the iPhone’s top-50 chart. Now its sequel seems destined for an even faster burn-out.
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This is a sharp reminder of how difficult it is to value mobile game properties and how tricky sequels can be in this industry.
While Zynga was attempting to desperately revive the original Draw Something and prepping the sequel, wave after wave of other popular word games washed over the mobile app market. Most notably 4 Pics 1 Word, What’s the Movie? and What’s the Word? These challengers were designed to be sticky and they’s smart-looking, yet they’re marketed as free downloads. The demand for premium price word games has collapsed.
And here comes Zynga with the $3 sequel to its $200 million game franchise — and it lasted precisely six days on the top-10 iPhone app chart.
Zynga’s reputation as an astonishingly slow and tone-deaf game developer is starting to edge into legendary territory. This is the first notable mobile app developer ever to be listed in the U.S. stock market. Yet the company seems to miss every twist and turn in the rapidly evolving app market.
In some ways Zynga resembles the appallingly badly managed British car vendors such as Wolseley, Humber and Sunbeam — industry pioneers that squandered the early advantages they possessed around 1900-1905.
This article was originally published on BGR.com
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