Zynga makes an overall loss of $400 million in 2011

Despite over 58 million people playing their games EVERY day Zynga reports a loss of $400 million last year. The announcement that was made in the Zynga Reports Fourth Quarter and Full Year 2011 Financial Results may come as a surprise to some people.

Read on for more.

Here is a snippet of what CEO and Founder Mark Pincus had to say in the financial reports.

“2011 was another milestone year for Zynga’s mission of connecting the world through games. We are seeing social games and more broadly play become one of the most popular pastimes on web and mobile. Zynga set new records in the year in terms of audience size, revenues and bookings. We saw great momentum in mobile and advertising and ended the year with a strong pipeline of new games. We are excited about the opportunities in front of us to continue delighting our current players and to bring play to millions of new people.”

This is not exactly a problem for Zynga but when you throw in a lawsuit for patent claims then this could be a few problem months for Zynga. They have recently been under fire from the gaming world, what was once a no-name Facebook and mobile app developer blew up with colossal hits like FarmVille, CityVille and Mafia Wars, become synonymous with controversy.

If you have a large number of Facebook friends and haven't set any spam filters, you may have experienced the wrath of Zynga spam. Invites to give a friend additional money or items and creating posts every time an achievement was earned were most common, and when this is carried out by tens of millions of people then it move past an mere annoyance.

Many have questioned the quality of games that mostly lack any real gameplay elements, but Zygna decided to counteract this by developing more unique games. The problem was that these 'new' games were shockingly similar to other Facebook and iPhone games. They have been accused of refusing "to innovate in any way, and is merely a follower when it comes to ideas and game design." Yet when another developer called Vostu released a similar game to Farmville, they were sued on the grounds that they infringed "the copyright-protected aspects of Zynga’s games(as well as almost every other aspect of Zynga’s business)"

The company currently employs around three thousand people and is estimated to be worth between seven and nine billion dollars, which is more than the whole of EA. Many have started to fear the power of such a company, hoping that the Facebook craze will die swiftly and Zynga will sink like the Titanic before casing any further damage to the industry.

$400 million dollars may seem like a small dent to Zynga, but it appears like they may have started falling, is the fad finished or will they recover and become stronger than ever?

Source: Businesswire

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