Sterne Agee analyst Arvind Bhatia believes that Zynga is losing $150 on every new paying customer it acquires.
Bhatia's estimate is based on the company's confirmed $120 million marketing budget for the first nine months of 2011.
"Almost all of that is for acquiring customers," he said in an interview with Benzinga. "We also know that they had 3.4 million unique payers in the September quarter, which is up from 3 million at the end of December 2010."
"In other words, they added 400,000 additional payers and they spent $120 million to acquire them."
The figures indicate that each new customer costs Zynga $300 to acquire, but each one will only spend and average of $150 over the 12 to 15 months that players stay with the company. "That math won't work for very long," Bhatia added.
This trend isn't limited to Zynga. Bhatia believes that there is a slowdown in social gaming in general, with many of the market's key players finding it difficult to raise interest through new products.
This is certainly true of Zynga, which has launched two games since its IPO last December: Hidden Chronicles on Facebook, and Scramble With Friends on iOS. Neither product has approached the early success enjoyed by Zynga's key titles, and its share price has suffered as a result.
"When we say that traffic hasn't gone up despite new introductions, that's telling us that maybe people are moving from one game to another, but you're not really getting a lot of incremental people trying them."
"The really hardcore are, perhaps, finding themselves trying FarmVille, Castle World and CityVille. The newer audiences are trying and finding that this is all the same and leaving."
"Again, the fact that there is such a small base of people who actually pay says that your risk is tremendous. This is spread out over 20 million people. You could say, 'Oh yeah, 5% could get bored.' Although, you only have 2 per cent of your people paying, and God forbid if those guys get bored."
Sterne Agee predicts that the results of this slowdown will become more apparent over the next 12 to 15 months, placing Zynga under intense pressure to find "their next Farmville" to keep investors satisfied.
"That's the bottom line. Until they can find that, if it's all incremental stuff that people are not really crazy about, it's gonna be tough to put up the kinds of growth numbers that the stock's multiple is implying."