Social gaming developer Zynga is reducing its workforce by five per cent and will drop 13 titles.
As social gaming continues to evolve, the mixed fortunes of one of its biggest players highlight the uncertainty in the market. Third quarter results for the company exceeded expectations in terms of revenue, at $317m instead of the predicted $256m, but earnings fell short of the forecast 1c rise per share, instead falling by 7c per share.
Zynga CEO and founder Mark Pincus also announced the Boston studio is to close with uncertainty surrounding the future of offices in the UK and Japan and 100 jobs to go at the Austin studio, US. The cost reduction plan, aimed at delivering Q4 savings of up to $20m, also sees 13 games being discontinued and reduced investment in The Ville, launched earlier this year.
In a conference call with analysts, Pincus said Zynga “didn’t execute” on its recent new games and underestimated the speed of mobile adoption. To return to high growth, he said, the developer would release two games in Q4 and four per quarter in 2013, including casino games and player-versus-player conflict games.
The company has also announced a deal with bwin.party to offer real-money gaming in the UK, with plans to launch poker and casino games, including slots, roulette and blackjack. It hopes the new revenue streams will help the company move on from its recent financial struggles.
