Virtual tractor market crashes; real people get crapped on
"There are more tractors sold in Farmville every day than are sold in the US every year." Fred Wilson, VC and principal at Union Street Ventures, December 30, 2009. Yesterday: Zynga lays off 520 people.
This week, Zynga laid off 520 people in Los Angeles, Dallas and New York, hoping to save between USD 70 million and USD 80 million. This came on top of news of a second quarter loss of USD 28.5 million to USD 39 million, a pretty big spread to ponder and a fact that got lost in the news of layoffs.
There was a point a few years ago when Zynga was all that:
"Now Pincus is set to become a multibillionaire as the largest shareholder in a company that is about to hold on Thursday one of the biggest initial public offerings of the year. Zynga’s billion-dollar IPO, at an $8.9 billion valuation, will be one of the biggest events in gaming history and will make it a financial peer to established rivals like Electronic Arts and Activision Blizzard. Through the IPO, Zynga hopes to meet the ambitious goal of investing more “in play than any company in history.” Venture Beat, December 12, 2011.
It sucks to write about layoffs.It sucks because, you get irrational exuberance from people with an agenda that leads to unreal expectations that results in the people who created the problem suffering no consequences while the starry eyed guys who jumped on the bandwagon come thudding back down to earth.
In the same beat, you have to admit Zynga was the product of irrational exuberance. There has got to be a time limit on the implosion on all virtual good sales. I mean, really, virtual tractor sales!
Maybe someone should point that out that the distance between multi-billion dollar game changer to wtf has been less than 2 years. Who pays for that insult? Not the guys who sold us on the multi-billion dollar game change thingy, that's for sure.