The shocking decline of social gaming company Zynga makes it appear that we are but fair-weather friends of "Farmville." "Something smells in 'Farmville,'" analyst Ken Sena of the Evercore Group wrote in a note to investors. He's one of many analysts who were surprised by the fast fall of this and other popular games played through Facebook. The decline appears to have cost Zynga 68 percent of its value since going public late last year.
According to AppData, which tracks the use of social media apps and games, Zynga's farming-simulation game went from more than 80 million monthly users in 2010 to 18.1 million as of yesterday.
My theory is that the decline of Zynga's games -- "Farmville," "Mafia Wars" and others -- is rooted in backlash. Playing these games once meant flooding your friends with requests to visit fantasy crop fields and join fictitious mobs, which ended up looking and feeling a lot like spam.
What's more, any benefit that Zynga was seeing from this aggressive notification model was likely offset by Facebook itself, which has over time sought to dial down such noise. Users have also taken matters into their own hands, posting detailed directions on how to block the gaming notification onslaught.
Zynga's games are supposed to be social, but are becoming a solo venture -- taking away a lot of the appeal and assuring the novelty will wear off more quickly.
Forrester Research senior analyst Sarah Rotman Epps sees the fall of Zynga as the crisis du jour. She says that social gaming is here to stay. Perhaps not so for companies like Zynga. "The services that enable those connections will come and go," she said.
The bottom line: Social gaming is a risky bet -- for everyone from individual investors to Facebook -- and will continue to be until someone figures out a way to make them more than a fad.
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