Mobile games giant Zynga ($PRIVATE:ZNGA) looks to be having a good year, on the surface. Its stock has slowly climbed throughout the pandemic months, and despite a series of mixed earnings reports, the company dished out nearly $2 billion on acquisitions of Turkish developers Peak Games and Rollic. Zynga also landed a major licensing deal, opening a studio in Texas to develop a Star Wars game. There’s just one thing holding Zynga back from the spitting image of COVID success: people are playing their games less and less.

Zynga’s concurrent player count is down 51% from the start of the year. Concurrent players have been on a downward trajectory since before the pandemic even began, though the early spring months saw numbers recover by about 10% as lockdowns took hold across the country. Zynga develops wildly popular mobile games like Words With Friends and the now-defunct Farmville as well as licensed mobile titles like Game of Thrones: Slots Casino and Wonka’s World of Candy.

You probably don’t need another weekly iPhone screen time report to realize we’ve all been on our phones a lot more than usual this year. Ratings for five of the top-performing free apps of the year on the Apple App store are up anywhere from 19% (Instagram) to 606% (Zoom), with social media and communications apps leaping ahead of the pack. 

Video games are getting their share of attention as well. The Nintendo Switch and now the Playstation 5 were so sought after that they flew off shelves and into the hands of scalpers. The pandemic has slowed down production on new titles, but sales are reaching record highs.

If both video games and social apps are doing better than ever, why is Zynga, a developer of social mobile games, not?

One simple reason is burnout. Zynga’s games are known for their addictive loops more than their depth, and nearly 10 months of playing the same game on your smartphone screen is enough to turn anyone off it permanently. There are only so many hours you can spend playing Words With Friends before the words you have for them aren’t so family friendly.

But Zynga is also facing steep and unexpected competition in the social, mobile games market. In 2020, deception game Among Us and Chinese-developed fantasy game Genshin Impact became breakaway hits. According to Google, Among us and Genshin Impact were the first and fourth most-searched games of the year, respectively. Among Us, which is free to play on mobile devices and $5 on computers, surpassed 217 million downloads in November and has generated $39 million in revenue, according to Sensor Tower. Genshin Impact, which released for free on phones, computers and consoles in September, has reportedly generated over $400 million in revenue since its launch and brings in approximately $6 million in revenue per day, again according to Sensor Tower.

The zeitgeist around these two titles surged even further thanks to their popularity on streaming platforms. Twice now, House Representative Alexandria Ocasio Cortez has hosted record-breaking streams playing Among Us with popular Twitch personalities. Genshin Impact has consistently ranked among the top games on Twitch and Youtube, partially thanks to a slot-like system through which players can spend real-world money on for a chance to unlock special characters within the game. This results in viral Twitch streams and Youtube videos in which creators “whale” on the game, spending thousands of dollars and reacting to their rewards like a movie character reacting to a winning slot machine pull. 

Developer and digital games merchant Valve got in trouble for the popularity of similar content back in 2016, when it decided to shut down gambling services worth $7.4 billion related to its game Counter Strike: Global Offensive after threats of legal action alleging that children were allowed and encouraged to gamble on such websites.

You will not find any of Zynga’s titles reaching these levels of popularity on Youtube or Twitch. The social aspects of Among Us and Genshin Impact make Zynga’s offerings look dull in comparison; Among Us and especially Genshin Impact are fully-fleshed out titles that have engaging features beyond their social components.

The mobile games audience is only growing, but Zynga is facing more competition than ever before as blockbuster titles release across platforms and as major developers like Epic Games and Activision Blizzard begin to offer mobile versions of their most successful games like Fortnite and Call of Duty: Warzone. As the mobile market expands further, Zynga’s acquisitions of studios with titles similar to their own show that Zynga is doubling down on its current strategy, hoping to attract people who are more likely to play a mobile game as a time waster or in passing than as a primary source of entertainment.

About the Data:

Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.

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