Blog
Unit 3 Micro: First Mover Zynga Loses Momentum
31st July 2013
These are proving tough times for Zynga - the online social game business. It has grown to a huge scale boasting 240 million average monthly active users over 175 countries. All of its games are free to play, and it generates revenue through the in-game sale of virtual goods and advertising.
The business enjoyed significant first mover advantage when ts games became an established and hugely popular presence on Facebook. But since its stock market debut in December 2011, when it was valued at £656m the company has struggled to sustain their success with games like FarmVille and Words With Friends,as web users have moved to mobile devices.
In March 2012 it bought OMGPOP, the company behind the popular game Draw Something, for $200m (£131m) but shut that business less than 12 months later. Recently the company has looked to online gambling as another revenue stream but with modest results so far.
Perhaps here is an example of a business that has found the first mover advantage has proved to be temporary in the fast-moving digital games market?
Zynga sees sharp fall in players and revenues (BBC news)
Zynga's post Facebook challenge (BBC news video)
Zynga Faces 'Another Year of Volatility' After Losing 40% of Players (International Business Times)
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.