Zynga's outlook doesn't look pretty -- can Pincus save it?
Add tumbling stocks to vanishing employees to fizzling games and you've got one uncertain company.
Zynga has been in a downward spiral the past several months. It's been hit from all sides, from plummeting share prices to Anonymous cyberattacks to a mass exodus of its top employees.
Despite CEO Mark Pincus' public positive attitude and go-getter mentality about the future of the gaming company, an article by the Wall Street Journal today reports that he may be less enthusiastic behind the scenes. According to interviews with dozens of current and former Zynga employees and investors, Pincus is apparently grappling with how to save the company.
During a September meeting between Pincus and business coach and Apple director Bill Campbell, the Wall Street Journal reports that Pincus was near tears. Pincus "was discouraged," Campbell told the newspaper recalling the meeting. He "felt terrible about what was happening; he felt the turmoil."
The Wall Street Journal reports that after Zynga's stock went into a virtual free-fall in April, after it acquired the game "Draw Something" for $183 million, several investors began to worry about the company. Then, as if those worries became reality, Zynga reported $52.7 million loss during its September quarter. When the company went public last December, its share prices were set at $10 -- they have since plunged 75 percent.
Besides tumbling stocks, Zynga's games are also failing to entice users at rates the company saw in years past. This is compounded by the fact that several of the game maker's top brass and game developers are walking out the door. Just this week, Pincus announced that Zynga's top finance executive, Dave Wehner, is leaving to take a senior position at Facebook.
Although Pincus declined to be interviewed by the Wall Street Journal, he did say that "rapid change in player habits and social technologies have dictated fundamental changes at Zynga. And when businesses change, it's inevitable that some people will choose to leave."
Despite concerns over the company's future, Pincus is making some fundamental changes to the company. Besides shuffling his management team and prodding COO John Schappert to leave last August, he is also working to reorganize the company's mobile gaming division. Pincus is also looking to get more hands-on with product development.
Earlier this week, he reaffirmed the company's financial outlook assuring investors that the company's been trying to focus on being a gaming platform for third-party developers, instead of a game creator for platforms like Facebook, to combat disappointing earnings.
Still, with stocks closing at an abysmal $2.29 per share today and the continuing rotating door for employee departures, it remains to be seen if Pincus can pull the company back onto its feet.