Zynga’s total Monthly Active Users (MAUs) declined last week for a third straight week, and the pace of MAU decline continued to accelerate, with a total decline of 5.9 million MAUs, or 2.4% of Zynga’s massive total user base, which now stands at 238 million. The MAU loss grew from the previous week’s drop of 4.2 million MAUs, and the loss of 3.1 million users the week ending May 1st. Treasure Island remained the only major Zynga title to add users last week, although the 900,000 net adds was modest compared to the 6.7 million it added week just three weeks ago. With 238mm MAUs, Zynga is now down over 5% from peak MAU levels reached mid-April.
Farmville, Zynga’s biggest game, was also Zynga’s biggest MAU loser last week, declining by 2.3mm MAUs last week, to stand at 75.5mm, and is now down by 7.7 million MAUs, or 9%, from its peak in early April. However, Fishville is Zynga’s biggest decliner in terms of numbers of MAUs lost from its peak MAU count, having dropped by 9.6 million MAUs, or 37% from its peak of 26.2 million MAUs reached last December. While Treasure Island still growing, Zynga’s seven other major titles are all below their peak MAU counts. The chart on the right highlights the MAU decline from peak levels of Zynga’s major hits other than Treasure Island.
It’s critical to recognise that MAU declines are not unique to Zynga, as every major game developer but Mindjolt lost MAUs last week. In addition, every one of the 11 major Facebook game developers we follow is off from their peak MAU levels reached over the last few months. The MAU loss from peak levels range from Playdom’s modest 1.7% drop (due to the recent growth of Big City Life) to Mindjolt’s staggering 37% drop. In fact the average MAU loss of 11% of the top 11 developers from peak levels is more than twice Zynga’s 5.2% total MAU decline from its peak. As a result, Zynga has continued to grow its MAU market share of the top 11 developers, reaching a very impressive all time high of 53.5% this week, or 238 million of the total MAUs of 445mm of the top 11 game developers. While the seven Zynga games highlighted above have lost a combined 31 million MAUs from their peak, Treasure Island has added over 27 million MAUs in the past six weeks.
We believe there are multiple factors driving the MAU declines being experienced by every major Facebook game developer. There are seasonal factors, as people go outside more in spring than winter. We estimate that Facebook’s gaming notification and gift request changes have impacted MAUs significantly more than the weather. We also believe that new/smaller developers are taking an increasing share of new MAUs, with last week rapid growers including Family Feud by iWin (up 900,000 MAUs last week), Kingdom of Camelot from Watercooler (up 500,000) and Nightclub City by Nightclub City (up 400,000). Finally, there appears to be some game fatigue occurring as well, as social games don’t yet engender the long term loyalty experienced by hard core games like World of Warcraft.
Current declines notwithstanding, we continue to believe that social gaming is emerging as the next major force in gaming. However, we also recognise the social gaming industry remains in the early stages of its evolution, and the success of today’s leading social gaming companies like Zynga, EA, Playdom and CrowdStar will depend on their ability to evolve in this dynamic environment and provide gamers with ever evolving gaming experiences. We also continue to believe that Zynga’s massive scale and the resulting inherent marketing advantages, positions Zynga to continue to drive new mega hits like Treasure Island and remain the dominant player in the social gaming industry.
Lou Kerner is a cofounder at SecondShares.com, a blog for news, commentary, and Wall Street style research covering the companies driving the social media revolution. For the last 10 years Lou has been a serial entrepreneur with previous ventures including Bolt Media, one of the original social networks which grew to over 20 million monthly uniques in its suite of youth focused web sites, and The .tv Corporation, which licensed the top level domain .tv from the tiny island nation of Tuvalu. Lou spent the first seven years of his career on Wall Street as an equity analyst following media companies at Merrill Lynch and Goldman Sachs.