Zynga founder 'near tears' over fate of struggling online gaming company which has seen Facebook revenue almost halve in the past year



The founder of Zynga, the creater of popular Facebook games including ChefVille and Words with Friends, has reportedly been ‘near tears’ over the company’s plummeting stock price and steady exodus of talent in recent months.

In public, CEO Mark Pincus has sought to remain positive about the long-term future of the company he founded, but in private it is apparently a very different story.

The company went public last December at $10 per share and its stock price then peaked in March at $15.91. At that point, Pincus took a gamble to acquire game studio OMGPOP for $180million.

CEO in trouble: Mark Pincus has reportedly been 'near tears' over the company's plummeting stock price and steady exodus of talent in recent months

Gambling with the future: Zynga Poker remains one of the gaming company's most popular titles

Since then the stock has lost about 85 per cent of its value as Zynga has struggled to come up with new popular games for mobile devices. At the end of Friday share price was just $2.22.

Last month in a desperate bid to slash costs, the company announced a raft of measures including eliminating games, shutting studios and cutting up to 170 jobs.



To help Pincus, investors sent in Bill Campbell, a technology veteran who has coached Silicon Valley CEOs such as Apple’s Steve Jobs and Google’s Eric Schmidt, reports the Wall Street Journal.

Mr. Pincus 'was discouraged,' Mr. Campbell told the Wall Street Journal . He 'felt terrible about what was happening; he felt the turmoil.'



Senior employees have been highly critical of Pincus for his lack of a strategic vision and poorly thought-out schemes to boost morale.

The company's senior management team has been shaken up, in part to make up for executive departures and in part to reorganize the company to tackle missed opportunities in mobile gaming.

Tumbling share price: The value of Zinga share is a fraction of what they were in March when the company purchased OMGPOP

Pincus has been coached by a Silicon Valley vet who has worked with Apple’s Steve Jobs and Google’s Eric Schmidt

Product director Jonathan Liu is amongst those who has had heated exchanges with Pincus in an attempt to turn around the struggling company.

About five per cent of its full-time workforce is leaving or has left as a result of last month's announcement. It marks the first-ever round of layoffs at Zynga, which is based in San Francisco and has about 3,200 employees.

Zynga also said it will ‘sunset’ 13 older games and reduce its investment in the game The Ville. It will close its studio in Boston and may close studios in Japan and the UK. It runs 18 studios worldwide.

Employees say morale is in steep decline, with Zynga forced this month to slash its 2012 results outlook for the second time.

Downsizing: The San Francisco-based social gaming company Zynga plans to slash 170 jobs and shut down several of its studios to cut costs

Juggernaut: Zynga makes five of the 10 most popular games on Facebook, including FarmVille

Zynga makes five of the 10 most popular games on Facebook, according to researcher AppData. In the latest quarter, Zynga accounted for 7 per cent of Facebook's total revenue, down from 10 per cent in the second quarter and 12 per cent in the third quarter of 2011.

The announcement comes after Facebook CEO Mark Zuckeberg said on an earnings call that the payments Facebook received from Zynga have dropped 20 per cent in the last quarter, even as overall revenues from other companies using the social media platform have grown.

As of late July 2012, Zynga's games had over 306 million monthly active users. Four of Zynga's games, ChefVille, Zynga Poker, Words with Friends, and Bubble Safari, have the most daily active users on Facebook, with ChefVille having over 7.2 million daily active users.