Three years ago this week, Zynga was the hot new kid on the stock-market block. Fresh off its initial public offering, the social game developer was valued at $11 billion on the strength of "FarmVille" and other smash hit applications on Facebook.
Shortly thereafter, consumers began rapidly moving to smartphones, leaving Zynga in the dust. The San Francisco-based company lost 87 percent of its value over the next eight months and has yet to recover, despite overhauling the executive suite and pouring its balance sheet into mobile game development. The current stock market value: $2.2 billion.
Whether the one-time Internet star can recapture its glory largely depends on the success of action-packed games like "Dawn of Titans," which Zynga is showing off on Thursday for the first time ahead of its upcoming launch. Created by NaturalMotion, the studio Zynga acquired last year for over $500 million, "Dawn of Titans" is the company's most aggressive effort yet to lure hardcore gamers, rather than just the casual and social type.
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The reason that market is so critical for Zynga comes down to economics. Four of the top 10 grossing games in Google's Play store and three in Apple's app store are action battle games, according to App Annie. On both platforms, the number one game is Supercell's "Clash of Clans," followed by Machine Zone's "Game of War: Fire Age."
Zynga doesn't have any games on iOS or Android that rank better than 19th.
"That's an important category because of the profit pools in it," said Clive Downie, Zynga's chief operating officer and a former vice president at Electronic Arts. "The top 10 grossing charts are generally reflective of mainstream consumer tastes."
Zynga's absence from the charts explains the company's 46 percent decline in revenue over the past two years to $690 million and the plunge in its stock price from a high of $15.91 in March 2012 to $2.39 as of Wednesday's close.