San Francisco-based Zynga pre-announced significant forecast cuts for its full-year earnings report on Thursday and is now seeing the affects today.
Shares of the game maker, which has a local development office in Seattle’s Pioneer Square neighborhood, fell 20 percent to $2.25 at 6:40 a.m. That’s the lowest intraday price since Zynga went public last December.
Yesterday, the company slashed its full-year revenue outlook from $1.15 billion-$1.23 billion to $1.08 billion-$1.1 billion. Some analysts had predicted revenue of $1.21 billion. Zynga also lowered its EBITDA guidance from $162 million to $147 million and wrote off about half of its $180 million acquisition of mobile game firm OMGPOP from March of this year.
Shares of Facebook, which hosts several Zynga-based games, were down 2.31 percent today.
The consumer trend from desktop to mobile is hurting Zynga, which has over 306 million monthly active users. Sterne Agee analyst Arvind Bhatia referenced low third-quarter traffic of three key new titles on Facebook — The Ville (July), Chefville (August) and Farmvill
Zynga CEO Mark Pincus wrote in a blog post:
The challenges we faced in our web business in Q2 continued in Q3 and while many of our games achieved plan, we still experienced overall weakness in the invest and express category. To address this we’re further investing in other genres like casino where we already lead with Zynga Poker and blue PVP, a category we pioneered with Mafia Wars, and now have the opportunity to reinvent with the industry’s best talent here at Zynga. While we’re disappointed with these financial results, we’re proud of the progress that our teams made on many fronts.
At the time of this post, shares were down more than 16 percent on the day.. Overall this year, Zynga’s shares are down 76-percent.