Tag Archives: gaming

Zynga: Out to Pasture or Buying the Farm?

FarmVille_logoBy one measure, Zynga’s FarmVille on Facebook (and MSN) is extremely successful. The measure being dedicated and addicted players numbering in the millions each day. By another measure, Zynga isn’t faring very well at all, and that’s making money. Despite a valuation of over $3 billion, the company is struggling to find a way to convert virtual game currency into real dollar spend.

How the internet ecosystem manages to reward the lack of real and sustainable value creation is astonishing to those on the outside — but good for those on the inside. Would that all companies could bask in the glory of venture capital and IPO bubbles on such flimsy financial foundations. Quack!

Zynga has been on company deathwatch for a while. Read on to see some of its peers that seem to be on life-support

From ars technica:

HTC

To say that 2013 was a bad year for Taiwanese handset maker HTC is probably something of an understatement. The year was capped off by the indictment of six HTC employees on a variety of charges such as taking kickbacks, falsifying expenses, and leaking company trade secrets—including elements of HTC’s new interface for Android phones. Thomas Chien, the former vice president of design for HTC, was reportedly taking the information to a group in Beijing that was planning to form a new company, according to The Wall Street Journal.

On top of that, despite positive reviews for its flagship HTC One line, the company has been struggling to sell the phone. Blame it on bad marketing, bad execution, or just bad management, but HTC has been beaten down badly by Samsung.

The investigation of Chien started in August, but it was hardly the worst news HTC had last year as the company’s executive ranks thinned and losses mounted. There was reshuffling of deck chairs at the top of the company as CEO Peter Chou handed off chunks of his operational duties to co-founder and chairwoman Cher Wang—giving her control over marketing, sales, and the company’s supply chain in the wake of a parts shortage that hampered the launch of the HTC One. The Wall Street Journal reported that HTC couldn’t get camera parts for the One because suppliers believed “it is no longer a tier one customer,” according to an unnamed executive.

That’s a pretty dramatic fall from HTC’s peak, when the company vaulted from contract manufacturer to major mobile player. Way back in the heady days of 2011, HTC was second only to Apple in US cell phone market share, and it held 9.3 percent of the global market. Now it’s in fourth place in the US, with just 6.7 percent market share based on comScore numbers—behind Google’s Motorola and just ahead of LG Electronics by a hair. Its sales in the last quarter of 2013 were down by 40 percent from last year, and revenues for 2013 were down by 28.6 percent from 2012. With a patent infringement suit from Nokia over chips in the HTC One and One Mini still hanging over its head in the United Kingdom, the company could face a ban on selling some of its phones there.

Executives insist that HTC won’t be sold, especially to a Chinese buyer—the politics of such a deal being toxic to a Taiwanese company. But ironically, the Chinese market is perhaps HTC’s best hope in the long term—the company does more than a third of its business there. The company’s best bet may be going back to manufacturing phones with someone else’s name on the faceplate and leaving the marketing to someone else.

AMD

Advanced Micro Devices is still on deathwatch. Yes, AMD reported a quarterly profit of $48 million in September thanks to a gift from the game console gods (and IBM Power’s fall from grace). But that was hardly enough to jolt the chip company out of what has been a really bad year—and AMD is trying to manage expectations for the results for the final quarter of 2013.

AMD is caught between a rock and a hard place—or more specifically, between Intel and ARM. On the bright side, it probably has nothing to fear from ARM in the low-cost Windows device market considering how horrifically Windows RT fared in 2013. AMD actually gained in market share in the x86 space thanks to the Xbox One and PS4—both of which replace non-x86 consoles. And AMD still holds a substantial chunk of the graphics processor market—and all those potential sales in Bitcoin miners to go with it.

But in the PC space, AMD’s market share declined to a mere 15.8 percent (of what is a much smaller pie than it used to be). And in a future driven increasingly by mobile and low-power devices, AMD hasn’t been able to make any gains with the two low-power chips it introduced in 2013—Kabini and Temash. Those chips were supposed to finally give AMD a competitive footing with Intel on low-cost PCs and tablets, but they ended up being middling in comparison.

All that adds up to 2014 being a very important year for AMD—one that could end with AMD essentially being a graphics and specialty processor chip designer. The company has already divorced itself from its own fabrication capability and slashed its workforce, so there isn’t much more to cut but bone if the markets demand better margins.

Read the entire article here.

Image: FarmVille logo. Courtesy of Wikipedia.