Few doubt Zynga's ability to amass large userbases in a short amount of time: on mobile alone, the studio revealed its library was attracting 13 million daily active users back in December.
The cost of adding to its base with such speed, however, may be sending the social studio spiralling down towards an early demise.
That's according to Sterne Agee analyst Arvind Bhatia, who believes Zynga loses $150 on every new paying user it attracts.
The true cost
Such an assumption naturally doesn't stem from Zynga itself, but is rather based on Bhatia's assessment of the outfit's publicly released figures: Zynga acquired 400,000 additional unique players in its September quarter, when the firm spent $120 million on sales and marketing.
Bhatia claims $120 million divided by 400,000 equals a cost of $300 per user, who its alleged spend around $150 each. As such, Zynga is losing $150 on each and every one of them.
It's a simplistic look at the studio's situation, but Bhatia's point is Zynga is too focused on growing its userbase rather than finding a way to operate a stable, profitable business.
"It's high to begin with, but we know that generally they say that a person is staying with Zynga for about 12 to 15 months," added Bhatia.
"Our concern is [whether or not it's worth] spending $300 to get these customers when people are spending $150. That math won't work for very long."
No mobility
Said figures focus on Zynga's operation on the web rather than mobile, though Bhatia is no more confident the firm has figured out a way to monetise on iOS or Android, either.
It's indicative of what Bhatia believes is a general slowdown in social gaming, as the industry realises it's a sector dominated by fly-by-night hits rather than long term earners.
"FarmVille peaked after eight or nine months, CityVille peaked after three months and then stayed at high levels for a long time," added Bhatia.
"Not immediately, but down the road this is going to catch up with them whether it takes three quarter or four quarters is hard to say. But our projection for the next 12 to 15 months is that growth is slowing significantly."
[source: Benzinga]
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