Social games titan Zynga has lost around 700,000 daily active users in the past five weeks, leading one financial analyst to raise concerns about the company’s proposed stock market launch in November.
“We view the user trends at Zynga as extremely troubling given the apparent lack of organic growth, particularly in front of an IPO that continues to be talked about at rich valuations in the $10 billion range", said Doug Creutz, analyst for Cowen and Company.
“At least as disturbing has been the degree to which new launches have begun rolling over almost immediately after the initial launch”, he said.
New data suggests Zynga has suffered a 40 per cent drop in its daily users for three of its five latest releases. The decline is thought to have affected Empires & Allies, Pioneer Trail and Adventure Peak.
According to Creutz, the new titles are "largely cannibalising users from old titles, and failing to attract new users to Zynga’s portfolio".
Despite releasing five games in the last four months, including Mafia Wars 2, Zynga’s overall user numbers dropped 1.5 per cent in the past five weeks.