Zynga Shutters Japanese Offices, 11 Social Games Including PetVille, Mafia Wars 2

Company scrambles to cut costs as it turns away from Facebook.

  @YannickLeJacq on January 02 2013 4:15 PM
Zynga Shutters Japanese Offices, 11 Social Games
Zynga (Nasdaq: ZNGA) is closing its Japanese branch and ending maintenance and development on 11 of its social games in an effort to cut costs. Reuters

As part of its ongoing effort to cut costs and return to general financial solvency and corporate stability, Zynga (Nasdaq: ZNGA) is closing its entire Japanese branch and pulling 11 of its underperforming social games from Facebook’s (Nasdaq: FB) game center.

A notice posted on the Zynga Japan’s website late in December 2012 announced that the company will be officially dissolved on Jan. 31, 2013. The branch was originally created in 2010 as a joint venture with the Japanese telecommunications company SoftBank (TYO: 9984) intended to capitalize on Japan’s enthusiastic gaming culture and SoftBank’s existing infrastructure of mobile and web technology.

Along with the continued office closures, Zynga is also letting go of several of its underperforming titles. A report from TechCrunch identified at least 10 titles so far including “PetVille,” “Mafia Wars 2” and “FishVille.”

“Thank you for supporting PetVille and for being a loyal player! We’re sorry to inform you that PetVille will be shutting down on Dec. 30, 2012,” one such announcement posted on PetVille’s Facebook page said. “In place of PetVille, we encourage you to play other Zynga games like Castleville, Chefville, Farmville 2, Mafia Wars and Yoville.”

As a sort of reparations system for loyal players, Zynga is offering care packages of free virtual goods that can be carried to more popular titles like “CastleVille” or “FarmVille 2.”

“We appreciate your participation in PetVille as it helped make the game a fun place to meet and war with friends,” the Facebook post continued. “As a loyal PetVille player, you are eligible for a one-time, complimentary bonus package in one of either Castleville, or Chefville, or Farmville 2, or Mafia Wars or Yoville. You can start the process by logging into PetVilleand clicking on the ‘Redeem’ button.”

Caught in a downward spiral of plummeting stock prices, falling user numbers and brain-drain, as executives fled the company en masse, Zynga has spent the last six months reshuffling its budget and resources to focus on the development of social and mobile games with a better chance of monetizing users than the average “FarmVille” player has historically proven.

Of particular interest here is online gambling with users’ smartphones, a form of digital media which by its very nature is questionably legal but effective in pulling more money from players who understand the cost of a game like poker regardless of the platform. But the company has also begun to focus on “midcore” gaming in the hope that attracting a more serious audience of “gamers” will also draw in players willing to spend more on a given piece of entertainment.  

Zynga still leads the Facebook app marketplace in terms of sheer user numbers by a wide margin, with two games in the top-five most-trafficked apps and over 250 million monthly active users (MAUs), according to Thursday’s figures from AppData. But these numbers have fallen dramatically along with the company’s stock price ever since it first released a weak second quarter earnings report late in July 2012.

Zynga shares jumped around 0.25 percent during the first day of trading in 2013, rising to $2.39 per share in late afternoon trading. 

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