Zynga’s stock fell roughly 40 percent, to a price of just over $3, after the company posted per-share earnings of just a penny, well below analysts expectations of 6 cents a share. The stock is down almost 80 percent from a high of $14.69 back in March, and market analysts have severely scaled back their guidance on the company. “We were wrong about the current state of Zynga’s business,” Morgan Stanley’s Scott Devitt said flatly in an analyst note. “Something smells in FarmVille,” wrote Evercore analyst Ken Sena, who thinks the stock will continue to fall.
What’s really troubling for Zynga, though, is that each new release seems to be seeing further diminishing returns, with smaller user peaks and quicker drop-offs. While CityVille managed to attract over 100 million users at its peak in early 2011, CastleVille peaked at just over 50 million monthly users after launching last November, and is already back down to 16.7 million players (The Ville, which launched earlier this month, is still in the “quick growth” phase of the pattern). This isn’t that surprising, since with each new wave of what’s essentially the same game, more players are likely to be overly familiar with the basic concepts already, and get bored that much quicker.