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Zynga recently hired Microsoft executive Don Mattrick as chief executive officer. He replaces co-founder Mark Pincus, who is now chairman and chief product officer. Unlike many, I don’t think anything has really changed at Zynga, despite the executive room musical chairs. All that change was done for the benefit of (mostly out of the loop) Wall Street investors.
Things are not going to be anywhere close to fine for awhile. During the just-announced earnings for the second quarter of 2013, the company saw a 31 percent decline in year-over-year revenues, a 38 percent decline in bookings and a loss of $15.8 million versus the $22.8 million it lost in Q2 2012. The worst part of Zynga’s misery, though, isn’t reflected in revenues — it is the company’s disappearing user base.
Daily active users (DAUs) decreased from 72 million in the second quarter of 2012 to 39 million in the second quarter of 2013, down 45% year-over-year. On a consecutive quarter basis, DAUs were down 24% from 52 million in the first quarter of 2013. Web DAUs and Mobile DAUs were 23 million and 16 million in the second quarter of 2013, respectively.
Monthly active users (MAUs) decreased from 306 million in the second quarter of 2012 to 187 million in the second quarter of 2013, down 39% year-over-year. On a consecutive quarter basis, MAUs were down 26% from 253 million in the first quarter of 2013. Web MAUs and Mobile MAUs were 129 million and 57 million in the second quarter of 2013, respectively.
Monthly unique users (MUUs) decreased from 192 million in the second quarter of 2012 to 123 million in the second quarter of 2013, down 36% year-over-year. On a consecutive quarter basis, MUUs were down 18% from 150 million in the first quarter of 2013.
Average daily bookings per average DAU (ABPU) increased from $0.046 in the second quarter of 2012 to $0.053 in the second quarter of 2013, up 14% year-over-year. On a consecutive quarter basis, ABPU was up 6% from $0.049 in the first quarter of 2013.
Zynga has to retrench and become a company that makes games, and then it has to maximize monetizaton. Of course, that means Zynga has to become a real gaming company — hence the hiring of Mattrick. Except for one small thing: Pincus in his twin role is still pretty much in charge.
Zynga’s product problem
Zynga, to be clear, has a product problem — and Pincus isn’t the answer. I mean, if he had the answers to its product problems wouldn’t he have fixed them when he was CEO? Zynga will continue to have a product problem because it doesn’t know how to crack the mobile market and it doesn’t know how to build engaging games. As a company, it has as much creativity as a piece of caked mud in a dry creek bed.
Of course, things aren’t going to work, and this time Zynga’s board will have a perfect fall guy: Mattrick. How long will he last? My guess is somewhere between 16 and 24 months. That’s about the time it takes for Pincus to fall out of love with new executive hires. Don’t believe me, just look at the executive exodus at Zynga.
- Owen Van Natta, formerly of Amazon, Facebook and MySpace, joined Zynga as chief business officer in August 2010. Fifteen months later, in November 2011, he was out the door.
- John Schappert, an Electronics Arts executive, joined as chief operating officer in June 2011 and exited on August 12 — about 14 months later.