The hits keep coming for Zynga. Problem is, hits for the social gaming company used to mean another uber-popular game—likely ending in -ville.
But lately those hits are body blows to the business’s bottom line: a 44 percent stock plummet following an especially rough third-quarter earnings report, the resignation of COO John Schappert, the loss of CityVille product head Alan Patmore to a competitor and the departure of chief creative officer Mike Verdu who plans to start his own gaming company (Zynga’s an investor, per All Things D).
Now Zynga’s chief marketing and revenue officer Jeff Karp has resigned, according to a regulatory filing posted on Monday. The filing states that Karp will stay on “in a non-officer capacity” and help with the transition through Sept. 22. Zynga did not immediately respond to a request for comment on Karp leaving and plans for his replacement.
While it’s hard to identify the one departure from the executive exodus that is the most troubling, Karp did oversee Zynga’s bottom line, so his resignation (whether voluntary or not) speaks to a different, more crucial side of the business than Patmore’s and Verdu’s. And Karp’s side of the business hasn’t been pretty.
Zynga saw its revenue increase 19 percent to $332.5 million in Q3 but failed to turn a profit, reporting a net loss of $22.9 million. Contrast that with Q3 2011 in which the company made $1.4 million in profits.
And the company’s cash cow—the revenue it generates through in-game purchases such as sales of virtual goods or currency—seems to be easing, while revenue from advertising accelerates (while remaining a minor share of total revenue). In the third quarter, game revenue climbed 10 percent to $291.5 million whereas advertising revenue grew 170 percent to $40.9 million.
PandoDaily ran through the three main reasons Zynga identified as leading to its Q3 struggles. In sum, the company faulted Facebook, game launch delays and its acquisition of Draw Something developer OMGPOP.