It's been an incredibly tumultuous week for the maker of hit Facebook games "FarmVille" and "CityVille." Not only are several law firms promising to investigate Zynga, but rumors are flying wild (and we do mean wild) that Facebook may be moving in for a buy out.
Last week, the San Francisco-based company saw its shares drop almost 40 percent to a humbling low of about $3 after a bleak second-quarter earnings report . Shortly thereafter Henry Blodget at Business Insider broke the news that several Zynga insiders, the CEO included, cashed out just before the stock crashed.
That one-two punch was followed up by a third blow: Several law firms have now announced that they will investigate claims that Zynga violated federal securities laws.
Reports Kotaku:
Schubert Jonckheer & Kolbe is investigating whether Zynga's insiders, including CEO Mark Pincus, were privy to insider knowledge when they sold their shares in April. Levi & Korsinsky is investigating "concerns that Zynga misrepresented and/or failed to disclose materially adverse facts about its business and financial condition," according to their press release.
And that brings us to Monday, when the business and gaming blogosphere went wild talking about a rumored Facbook buyout.
A little poking around suggests that this rumor seems to have gotten its start with a post on stock market analysis site Seeking Alpha, where an analyst merely takes a look at who could buy out Zynga at this rocky point in its life. His other suggestions: Google and Apple.
His suggestions are interesting, but far from anything approaching a certainty. One thing is for certain though: Zynga is pinning some of the blame for its current woes on Facebook.
"We are lowering our outlook to reflect 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," Zynga said in its earnings statement.
CEO John Schappert further explained to investors that Facebook has been emphasizing new games in its news feed, notifications, bookmarks which has hurt existing games.
Where Zynga's wild ride will end is certainly difficult to tell.
Regarding the lawyers promising to take the company to court, it is important to note (as many business pundits have pointed out) that while Pincus sold $200 million in stock and Schappert sold $3.9 million, these numbers reflect just a small part of what they hold in total. So it's not like they haven't been hurt by the plummeting shares as well.
Times may be tough for the company and there are many, many factors influencing its success. But here's my humble gamer's opinion: Zynga could certainly help its odds of turning things around if the company would focus on making games full of engaging original ideas ... rather than continue churning out titles that seem like retreads of all-too-familiar ideas (I'm looking at you "The Ville,""CityVille," and "Zombie Swipeout.")
Give us a reason to get excited about your games, Zynga. We're ready to play.
Winda Benedetti writes about video games for NBC News. You can follow her tweets about games and other things on Twitter here @WindaBenedetti and you follow her on Google+. Meanwhile, be sure to check out the IN-GAME FACEBOOK PAGE to discuss the day's gaming news and reviews.
