In the conference call discussing Zynga’s latest earnings report, CEO Mark Pincus acknowledged that the company has not met its own goals for growth, something he blamed on two things — “game execution” and the growth of mobile.
On execution, Pincus said Zynga had struggled to “maintain the historical level of engagement” in its Ville franchise of games: “We didn’t create enough new heat for our players by innovating on content and features.” He added that the company also failed to release enough new games to offset those declines.
On mobile, he said the industry has seen “faster-than-expected player adoption of mobile smartphones and and tablets” — in other words, the growth in mobile gaming means Zynga’s web games have to fight harder for players’ attention.
That discussion comes after Pincus announced a “cost reduction plan” yesterday, which included laying off 5 percent of the workforce and sunsetting 13 games.
Despite the cuts, and despite admitting that there are problems, Pincus said he’s still confident about “growth and profitability in our core business.” For one thing, he pointed to the success Zynga has seen so far with Farmville 2 (500,000 unique payers and 60 million monthly active users, as mentioned in the earnings release) and Chefville. He also said that moving forward, the company plans to launch two new games on the web and four new mobile games each quarter next year. Those titles will include a game aimed at “mid-core” players (as opposed to the casual gamers Zynga has targeted so far).
Asked later in the call to elaborate on these comments, Pincus emphasized that Zynga has had some successes this year, but he said the company hasn’t managed to execute “consistently.”