Zynga released its Q4 and year end earnings yesterday, and the results weren’t exactly peachy. The company was able to increase it’s year-over-year revenue, but everything else was relatively flat. Zynga has to start cutting costs somewhere to turn a profit, and shutting down games appears to be the first strategy on its list.
During its conference call yesterday, Zynga said that it will begin shutting down games that are failing to meet expectations. The first round of games getting the cut include CityVille 2, The Friend Game and Party Place. The unfortunate thing is that all three of these games are less than six months old, and were never really given a chance. All of this is part of a new “guard rails” system that requires the company to prematurely shut down games that don’t find an immediate audience.
The above three games are the latest in a long string of games that Zynga has shut down in the past six months. Late last year, the company announced that it would be closing games like Mafia Wars 2, Treasure Isle, FishVille and others that were not able to find an audience. To cut costs further, it also closed its Boston and Japan studios.
It may look grim for Zynga, but the company says its on track to being profitable in 2013. For one, FarmVille 2 has been an unprecedented success for the company by exceeding expectations and being its best launch in two years. The company is also realigning its teams to work on mobile, real-money gambling games for the UK and mid-core titles to bring in more players.
Will Zynga become a profitable company in 2013? It’s hard to say at this point, but the company seems to be legitimately learning from its mistakes. It used to flood the market with games, but it will now be spacing out releases so that one doesn’t cannibalize the other. The move to gambling and mid-core titles will probably bring in new players as well.