Zynga Inc (NASDAQ:ZNGA) on Monday announced to slash almost one-fifth of its workforce and close three offices. The plight of the game maker may be taken as a lesson for all the firms in the technology world that a company, which fails to shift customers from the desktop version to the mobile devices, may have to struggle, says a report from Huffingtonpost by Timothy Stenovec.
Zynga’s Online Games:
The warning is perfectly valid for Facebook Inc (NASDAQ:FB) that has given millions of users to Zynga’s online games. The social networker itself acknowledged that the transition from the desktop to smartphones and tablet devices has been slow.
Andrew Daily, managing director at MGI Research, which is an independent research and advisory firm, told that from Zynga Inc (NASDAQ:ZNGA)’s plight it is clear that everything is shifting to mobile, and this intensifies the pressure on Facebook Inc (NASDAQ:FB) to come out with innovative ways to monetize revenues from mobile devices.
As per the numbers from IBISWorld, an industry research firm, American mobile internet connections are expected to reach 204 million this year against 24.3 million in 2008.
Facebook has been impressive
Zynga has been slow to make a move towards mobile devices. For the first quarter, Zynga Inc (NASDAQ:ZNGA) posted less than one-quarter of its bookings from mobile, though the number was up 7 percent from a year earlier.
However, Facebook Inc (NASDAQ:FB) has been quicker, compared to Zynga Inc (NASDAQ:ZNGA), to increase its share of mobile revenue. For the first quarter, about 30 percent of the total revenue came from mobile compared to 23 percent in the previous quarter.
This has been a significant achievement for the social networker as, at the time of IPO about a year ago, a filing from the company reveals that it did “not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”
Facebook’s acquisition of Instagram, the photo-sharing service, has been an important weapon in the company’s mobile transition. However, Facebook Inc (NASDAQ:FB)’s other mobile efforts have not fared that well. Facebook’s Poke, a Snapchat-like messaging service, failed to gain any significant market share. Facebook Home, the company’s “apperating system” received poor reviews from experts and users.
Zynga Inc’s Struggle Pressurized Web Services Firms:
Zynga Inc (NASDAQ:ZNGA)’s struggle has pressurized the web services firms to come up with innovative solutions to successfully shift the users from desktop to mobile devices without actually losing on revenues.
“We have yet to see if the dollars in mobile can replace the dollars from the desktop,” said Ben Schachter, a senior internet analyst at Macquarie Group. “And I think that’s what a lot of the investment community is waiting to see.”