Zynga, the maker of FarmVille and buyer of little companies like OMGPop, appears to be hemorrhaging money.
Between the oversaturation of the mobile gaming marketplace and the steady decline of gaming specifically on Facebook, Zynga’s games have seen massive user losses. In two years, the daily user count has dropped from 39 million to 21 million.
That decreasing playerbase has lead to a continued loss of money. Between 2012 and 2014, Zynga lost more than $472 million. In the second quarter of 2015, Zynga lost $26.8 million. That brings the current total losses for 2015 to $73.3 million.
If Zynga keeps that pace of money loss, the company could see $150 million lost this year when all is said and done.
Zynga, apparently, is well aware of what lies ahead. They warned investors what losing users means in their official financial report.
Our financial performance will continue to be significantly impacted if we continue to lose users. If we fail to sustain the number of our paying players, if the rates at which we attract and retain players declines or if the average amount our players pay declines, our business will continue to decline and our financial results will suffer.
Are we looking at the end of Zynga in the next year or so? Or, is that far too hyperbolic?