Is Social Gaming Just Another Fad ?

Many online bingo operators are having second thought about entering the world of social gaming. Recently social gaming giant Zynga cut over 100 jobs and closed offices in Boston, the UK and Japan. In Austin Zynga let two development teams go. Zynga has developed several popular Facebook games including Zynga poker, Zynga bingo and their flagship game Farmville. Facebook is starting to feel the pressure from Zynga’s troubles. Facebook CEO Mark Zuckerberg is not happy and told investors during a conference call “Gaming on Facebook isn’t doing as well as I’d like.” Zuckerberg told investors that most of the troubles have been caused by Zynga’s ongoing problems.

Since the company’s IPO earlier in the year Zynga shares continue to slip. Facebook’s revenues from gaming have declined 20% year on year. The current turmoil at Zynga has caused Facebook’s revenues from payments and fees declined 9% quarter on quarter to $176 million. This is the first major revenue decline for Facebook. Zynga’s revenues have fallen short of earlier estimates and players are leaving Zynga’s games in droves. One of Zynga’s most popular Facebook games, The Ville, has seen player numbers fall from 26million to 17 million. In the past Zynga has played a major role in Facebook’s performance. Zuckerberg did offer investors some hope when he said that smaller social game companies like Kixeye, Wooga, and are garnering market share and are in part making up for the losses caused by Zynga’s troubles.

Zynga’s bad news was released at the same time Apple was introducing its new mini iPad. Zynga executives hoped investors would be distracted but the news quickly spread on Twitter and, ironically, Facebook. Most experts believe that Zynga’s third quarter results will show significant losses. Since Facebook is depending on real money gaming to shore up its waning stock prices Facebook executives are not going to be happy. Zynga’s bingo app has seen a monthly decline from 5.8 million to 5.4 million. Some gaming experts are now wondering if social gaming is just another fad that will fade with time. Others say that real money social gaming has a bright future.

The use of social media is nothing new to online bingo players and operators. Most online bingo brands use social networking pages to attract and retain players. Chat rooms have been a fixture at online bingo sites for years and have added to the popularity of the game. Only time will tell whether social gaming is just another internet fad.

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