Electronic Arts (NASDAQ:
) has announced today at its press conference at E3 that it is
releasing a social version of SimCity, known as SimCity Social,
which is set to compete with one of Zynga's (NASDAQ:
) mainstay games, Farmville, and subsequent games such as
Cityville. SimCity Social will be available in about three weeks,
says Lucy Bradshaw, Senior VP of Maxis, the unit that is
responsible for the Sim series of games.
If successful, this new launch could significantly hurt Zynga,
as it shows that the life-span of the first mover advantage into
social games may quickly be going. SimCity is a brand that has a
strong group of followers, and the migration of a large number of
Farmville users to SimCity Social would be a death blow to Zynga.
Last year, the Sims Social already attracted more monthly active
users than any Zynga game, and SimCity Social may even overtake
that. The question becomes, how many users will Zynga lose and
how does it make up for this?
Zynga's product offering has continued to grow, but questions
continue to be raised over the viability of its business model.
Zynga is largely dependent on Facebook (NASDAQ:
) and mobile applications through Apple's (NASDAQ:
) App Store, Google's (NASDAQ:
) Android Marketplace, Microsoft's (NASDAQ:
) Marketplace, and RIM's (NASDAQ:
) Blackberry App World. With Facebook's growth stalling and now
increasing competition from brand-name games moving into the
social networks, this could be the nail in the coffin for
Zynga does have a good portfolio of popular games, however
social games become saturated markets very quickly. Apps become
yesterday's news, and Zynga is a victim to this trend. Zynga's
fate will be decided in the next few years, as they fight growing
competition and slowing growth. Zynga's shares closed down about
5% today and are down about another 1% after-hours. Zynga is
trading within 6 cents of its 52-week low.
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