It's been talked about for a while now but today Zynga filed it's S-1 Form with the U.S. Securities and Exchange Commission (SEC). I don't know much about all this stuff but you can go here to view the entire S-1 Form. It's quite extensive but all the information is there if you feel like going through it. To get a great analysis of what this all means, check out this article by TechCrunch.
(image from Mashable)
(image from S-1 Registration Form)
They really couldn't and didn't exaggerate the Monthly Active User stats listed on the S-1 Form. You can see when rounded up, it's very accurate.
(image from All Facebook)
| Article written by Jennifer Patterson, Creator of the MW Loot Lady Blog, The Mafia Wars Loot Lady Facebook Fan Page and Co-Host of The Informant Podcast. |
from the IPO filing -
ReplyDelete"Facebook is the primary distribution, marketing, promotion and payment platform for our games. We generate substantially all of our revenue and players through the Facebook platform and expect to continue to do so for the foreseeable future," the filing explains. "Any deterioration in our relationship with Facebook would harm our business and adversely affect the value of our Class A common stock."
Which means Zynga marches to FB's drum beat.
Zynga also notes that "[a] small percentage of our players account for nearly all of our revenue. We lose paying players in the ordinary course of business... we must attract new paying players or increase the amount our players pay," the filing states. In other words, Zynga could retain almost all of its current players and still see significant declines if its small paying customer base shifts.
The future of MW and other Zynga games is stated in that paragraph.
I can tell you this is why Zynga is trying so hard to get people to spend their tokens. Right now their accounting books must look bad with all the unearned Revenue that is out. People buy the tokens but still have them so it is considered unearned and therefore can not be counted as an asset. It is in fact considered liability aka debt. So carrying debt when you attemp an IPO would not be good for the company when they want maximum prices.
ReplyDeleteReally the monthly active (downward) usage numbers mean very little to a company. It would if they rely heavily on advertising though but I do not think that is the case. As the other anonymous posted already... their revenue is mainly generated by the loyal credit card players.
ReplyDeleteI would translate this sentence more like "We must get more new players who buy virtual goods, because players leave the game. And we don't care about the reasons for this." Look not only in the official Zynga MW forum, look in the other games forum, specifically in the suggestion and bug report sub-forums.
ReplyDeleteI have got to get out more.
ReplyDeleteIt is interesting to think of the RP we all have as our savings in the Bank of Zynga but the debt comment above makes this clear.
From the hardest up soul that gets one a day from leveling to the guy with the diamond studded platinum card we have one thing in common. If there is nothing worth spending your RP on they just sit there and slowly grow. That means no cash for Zynga.