Whoa! Zynga Shares Down *35%* in After-Hours Trading

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The gamesmaker is now losing money in an increasingly "challenging environment."

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The Facebook-dependent gamemaker Zynga reported a loss of $22.7 million for its second quarter this afternoon and investors are not happy. They've pushed the stock down a staggering 35 percent to about $3.30 a share in after-hours trading. The stock traded up over $14 as recently as March.

The loss stemmed from "delays in launching new games, a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform, and reduced expectations for Draw Something." Worse, Zynga cut its full-year earnings forecast range to 4 to 9 cents per share. Wall Street analysts expected full-year earnings of 27 cents a share.

That's ugly. Making casual games has always been a volatile, hits-based business, but the companies of yore like PopCap weren't public, so we couldn't see just how precarious this industry is.


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Alexis C. Madrigal

Alexis Madrigal is a senior editor at The Atlantic, where he oversees the Technology Channel. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer calls Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at Wired.com, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science Web site in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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