Social games giant Zynga has been unable to reignite user growth for its games despite launching five titles in as many months.
According to analysis from Cowen & Company, Zynga has shown no growth in daily active users (DAU) since reaching it current average levels of around 47 million players in October 2009, despite increasing the frequency of releases.
Between June and October 2011 the company released five new games: Empires & Allies, Pioneer Trail, Words with Friends, Adventure World and Mafia Wars 2. But total DAUs declined for the company's portfolio over that five month period, from 49.2 million to 46.9 million.
"While DAUs have ticked up slightly over the last month, given the launch of Zynga's most important new title for the year, CastleVille, the modest increase in November has to be a disappointment," said analyst Doug Creutz.
"The lack of real DAU growth appears to be partially a function of general overall erosion in the DAU base for Zynga's older titles and partially an acceleration of user churn since the launch of CastleVille."
In the two weeks ahead of the launch of CastleVille Zynga lost 1 million daily active users across 9 games; in the two weeks following the launch that increased to 2.8 million.
The evidence is very strong that Zynga's new releases are simply attracting new users from previous Zynga games, and that few new users are entering the Zynga ecosystem
Doug Creutz, Cowen and Company
"We think the evidence is very strong that Zynga's new title releases are simply attracting new users from previous Zynga games, and that few new users are entering the Zynga ecosystem.
"We also note that the growth windows of Zynga's new titles have been getting shorter and shorter; the October title Mafia Wars peaked just 8 days after its launch, and while CastleVille still appears to be growing, DAU growth was 6 million in week one versus just 900,000 in week two to-date.
"We think Zynga has yet to answer the question of how it intends to grow its business from this point forward, a key question in front of its attempt to launch an IPO," added Creutz.
Discussing Zynga's closest rival on Facebook, Electronic Arts, Cowen & Company noted that its recent launch, The Sims Social, has dropped daily active users from a peak of 11 million in March to an average of 6 million.
"If the game stabilises here, it will still represent a significant success for EA as the only non-Zynga title above 3 million DAUs," offered Creutz.
"However, we do think it is important that EA continues to roll out new content for the game to keep it fresh. EA needs to support Sims Social to give it staying power. Additionally, EA needs to roll out some new Facebook titles soon to capitalize on the installed base of Sims Social."