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