Zynga shares drop as new games unveiled - MarketWatch

SAN FRANCISCO (MarketWatch) â€" Shares of Zynga Inc. slumped Tuesday after the company announced a handful of new game titles for both the company’s mobile and social lines, including two new entries for its flagship “Ville” series.

At an event at the company’s San Francisco headquarters, Zynga (US:ZNGA) showcased several recent and coming releases, as well as plans to open more of its network to third-party game producers as the company evolves to become a larger publisher of mobile and social games beyond its own properties.

Zynga’s shares, which had made some mild gains ahead of the event, closed the day down nearly 5% at $5.76.

Colin Sebastian of Robert W. Baird said the day’s action was likely some “selling on the news” from investors who might have been expecting a wider or more diverse line-up of new games.

“I think there was some selling on the news, and investors were disappointed that it seemed like more of the same,” he said. “From my perspective, they do seem to be sticking to their knitting in terms of games, but the platform and infrastructure build-out is important and they continue to make progress.”

Neil Doshi of Citigroup called the day’s announcements “modestly positive, but somewhat uneventful” in a note to clients.

The stock has fallen sharply since March, dropping below its $10 IPO price in mid-April, due to concerns about its heavy reliance on Facebook (US:FB) for its revenue base as well as indications of slowing activity levels on its games from AppData, a third-party source that compiles usage data on Facebook applications.

On Tuesday, the company highlighted new and coming titles designed to build out its growing mobile business. It also added more entries to its flagship line of ‘Ville games that have become the company’s best-known properties that include as “CityVille” and “FarmVille.”

Zynga is launching “The Ville” on Wednesday as a house-based social game. It also showed off a new cooking game called “ChefVille” that will launch on Facebook and its own Zynga.com network sometime later this year.

On mobile, the company announced “Matching with Friends,” which launched commercially today. It also announced several partnerships with other mobile game makers to act as a publisher for their titles. One of these game makers is Atari, though no details were given as to which game Zynga might launch from the well-known game maker.

The company is also adding to its casino line with “Elite Slots,” though no release date was given.

Zynga also spent time at its event on Tuesday highlighting the back-end network it has built to launch and operate its games. Kostadis Roussos, the company’s chief engineer, said the company has been able to migrate about 80% of its gaming activities to its own proprietary service called zCloud, away from the public cloud.

The company releases about 100 updates to its games each day, which does not include content generated by its cast network of players, Roussos said.

“This is a world where social games take serious engineering, serious scale and serious analytics to make them work,” he said, contrasting his business with traditional game publishers. “We don’t ship plastic boxes. We ship live services.”