Well their daily active users were down despite hiring and acquisitions. Pre-IPO, I would say that a declining user-base is not a selling point for a social company.
Could this just be a gap in between new games? Zynga games do seem to be sticky and addictive but there is going to be a lot of attrition the longer a game is around.
Yes, I imagine that could definitely have something to do with it. I also think part of it is that others (Sims Social) have shown they can build sticky and addictive games as well and Zynga is no longer the sole owner of the space.
If they were already public, this would likely cause a huge drop in the stock price. Similar to what happened to Netflix when they guided down on number of subscribers.
When you've sold yourself as a growth story, the reasons for the decline don't matter to Wall Street. Sell side analysts build complex earnings projections models based on estimated compounding growth rates. Even a slight reduction in the growth rate has a large impact on projected earnings a few years out and a negative growth rate blows up the entire model.
