Zynga, the company behind FarmVille, Mafia Wars, and other popular games on social media platforms, has been in turmoil recently. Late last year, the company incurred a loss of $52.7 million, which consequently led to over 100 employees being laid off and several of its studios being shut down. In addition, Zynga has seen the departures of CCO Mike Verdu, COO John Schappert, and Chief Designer Brian Reynolds. Considering that Zynga was once one of the most profitable companies in the world, this is rather startling.
Additionally, Zynga has also been the target of threats from hacker group Anonymous, which threatened to release confidential information in response to the company’s alleged mistreatment of employees and other game developers, and a copyright infringement lawsuit from game publisher Electronic Arts, which claimed that the Zynga game The Ville blatantly copies one of its games.
Unfortunately, Zynga’s troubles don’t seem to be going away anytime soon. Since July 2011, Facebook has had an exclusive business relationship with Zynga in which Facebook helped Zynga gain players for its games, a benefit that was not afforded to other companies developing games for Facebook. That relationship ends at the end of this month, at which point Zynga will be treated the same as other Facebook game developers. Considering that Facebook was invaluable to increasing Zynga’s consumer base (at its peak, FarmVille had over 82 million players a month), this loss will no doubt add to Zynga’s troubles.