Zynga Inc (ZNGA) Stock Winning Back Some Lost Ground

Updated on

Zynga Inc (NASDAQ:ZNGA)’s stock, after struggling for a couple years, is showing some signs of improvement. Year to date, the shares of the troubled game maker are up almost 50%. According to a report from Investorplace by Tom Taulli, the impressive run can partly be attributed to the highly awaited IPO from the King Digital Entertainment, the developer of the popular game Candy Crush Saga.

Mattrick’s lead paying off

Apart from benefiting from the buzz surrounding the rival’s IPO, Zynga Inc (NASDAQ:ZNGA) is also gaining from the strategies deployed by the new CEO, Don Mattrick, according to the author. During a recent Morgan Stanley (MS) Technology, Media and Telecom Conference, Mattrick did touch upon some of those moves.

Mattrick, who has been part of organizations such as Electronic Arts and Microsoft Corporation (NASDAQ:MSFT), is now facing a mammoth challenge of reviving the dipping fortunes of the once popular game maker. Mattrick is popularly known in the gaming world for developing franchises like Need for Speed, the Harry Potter games, and The Sims.

Zynga plans to monetize evergreen franchises

The CEO sounded extremely optimistic, when he said that Zynga’s best opportunity lies in gaming. In his initial moves as the CEO, Mattrick lowered the headcount from around 3400 to almost 2400 to support operations. And now, he is focusing on making Zynga Inc (NASDAQ:ZNGA) games more appealing to users for which he is effectively utilizing evergreen franchises like FarmVille, Zynga Poker and Words With Friends. To date, these games have been very successful for Zynga, and now the plan is to “give the titles more attention, especially on the mobile side,” according to the author.

State-of-the-art graphics play a pivotal role in the determining the success of the game titles. This might be the same reason why Zynga Inc (NASDAQ:ZNGA) recently acquired NaturalMotion, developer of popular mobile game Clumsy Ninja and a veteran in developing procedural animation technology. The strategy of focusing on mobile monetization does make sense as the market for smartphones is growing at a brisk pace.

On Wednesday, Zynga shares were up 0.71% at $5.69.

Update: removed a sentence from the last para that talked about real-money poker plans as the information was inaccurate.

Leave a Comment