After Farmville success, Zynga not ready to plunge into mobile

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.

Credit: Reuters/Robert Galbraith

By Gerry Shih

SAN FRANCISCO | Tue Jul 10, 2012 8:10pm EDT

SAN FRANCISCO (Reuters) - Zynga Inc CEO Mark Pincus said Tuesday he remains wary of investing as heavily in mobile games as he has in proven Web-based titles like FarmVille despite an industrywide push toward catering to mobile devices.

Game industry observers in recent months have stressed that developers must adapt as Internet users worldwide shift toward spending time on smartphones and tablets rather than desktop computers.

Concerns that Zynga continues to rely too heavily on its Web titles built on top of Facebook's platform have weighed on the stock, which has fallen roughly 50 percent from its $10 IPO price in December.

Speaking at an industry conference in San Francisco, Pincus said it was "obvious" that game companies should be investing heavily in mobile games — Zynga itself splashed $183 million to acquire New York-based game studio OMGPOP in March — but added the company's emphasis remained on Web games, given uncertainties about how the mobile platform will mature.

"We invest north of $10 million in a potential franchise game like the Ville," Pincus said. "We can't make that investment yet confidently in mobile. And I'm confident in the next couple of years we'll get to the point where we can. But it's not there yet and I think it's a little chicken or egg."

Pincus said he was held back by some unresolved questions over the still-maturing mobile platform, such as whether the Adobe Air and HTML5 technologies will become accepted standards.

"We've made a huge investment in mobile, organically building up teams and products and with one large acquisition," Pincus said. "We're at the point where it's obvious that we all should be investing heavily. But I don't think we have that all-in confident moment. The flywheel isn't there in an obvious way."

Pincus's hesitation in the mobile market stands in contrast to Zynga's all-out approach to its Web hits, which feature sophisticated social mechanics that are constantly analyzed and refined by dozens of Zynga engineers even years after they are first released.

Titles like CityVille and FarmVille, built off Facebook's platform, have helped Zynga squeeze $1.1 billion in revenue in 2011 out of an average 223 million monthly active players in 2011.

In a move to wean itself off of Facebook, Zynga announced in June that it would open its platform to encourage independent developers to build games on top of Zynga's own network.

Zynga also unveiled a new slate of games. For its latest offerings, Zynga has poured 100 developers who have worked "well over a year and a half" to ship its new titles "The Ville," a Sims-like social game, and "ChefVille," a kitchen management game, Pincus said.

But any efforts to roll out these games across multiple platforms will prove difficult, if the past were any indication, Pincus acknowledged.

"We were too ambitious at first with FarmVille," Pincus said. "We spent a huge amount of engineering to build a totally synchronous game experience."

(Reporting By Gerry Shih,; additional reporting by Malathi Nayak; editing by M.D. Golan)

View the original article here

Read More

Bloomberg sites blocked in China days after Xi family wealth story

BEIJING | Wed Jul 4, 2012 4:45am EDT

BEIJING (Reuters) - Bloomberg's news websites remained blocked in China five days after it issued a story about the finances of the extended family of the country's vice president, highlighting how Beijing is trying to shape public opinion ahead of a leadership transition.

Bloomberg said it believes its English-language website and its Business Week site were blocked on Friday by Chinese authorities after it published details about the multi-million dollar fortunes of Vice President Xi Jinping's extended family.

Beijing will hold a once-a-decade leadership transition this year during which Communist Party chief, President Hu Jintao, and Premier Wen Jiabao will hand power to a younger group of leaders, headed by the party chief heir apparent Xi.

The government is determined to guard against any signs of discontent that could escalate into broader protests and threaten the Party's authority as the new generation takes over amid destabilising scandals and economic uncertainties.

In an emailed statement, Bloomberg spokeswoman Belina Tan said: "Our website is currently inaccessible in China in reaction, we believe, to a Bloomberg News story that was published on June 29."

She would not comment on whether Bloomberg was in talks with the government over the issue, but said "there is no impact" to the company's other services, including terminal feeds used by clients to access economic data and news.

Asked at a foreign ministry briefing last week about the blocked websites, a ministry spokesman did not respond directly but said all websites must abide by China's laws.

In its article, Bloomberg stated that no assets were traced to Xi, his wife or their daughter, adding there was no indication Xi intervened to advance his relatives' business transactions, or of any wrongdoing by Xi or his extended family.

Privately-held Bloomberg competes with Thomson Reuters, Dow Jones & Co, a unit of News Corp, and other news and data providers.

China's blocking of websites and censorship of search results for politically sensitive terms is known colloquially as the "Great Firewall of China", though some Internet users have skirted restrictions by using code words.

Government censors ban numerous overseas websites, including Facebook, Twitter and YouTube, and some foreign media outlets, fearing that sharing of images and information could cause social instability and harm national security.

(Reporting by Michael Martina; Editing by Ken Wills, Ian Geoghegan and Dean Yates)

View the original article here

Read More

RIM prospects dire after launch delay: analysts

n">(Reuters) - Research In Motion Ltd could run out of cash and ultimately fail, even with the launch of its now-delayed BlackBerry 10 device early next year, Wall Street analysts said.

At least 10 brokerages cut their price targets on the stock, some by as much as 50 percent, a day after the company reported worse-than expected quarterly results and said it would delay the launch of its next-generation device to early 2013 from late this year.

RIM shares were down 16 percent in pre-market trading on the Nasdaq.

"If RIM continues to be run as it is, we believe that the company will eventually fail," Nomura Equity Research said.

"We do not expect RIM to successfully drive a turnaround of its financials, even with the launch of BB10 next year," the brokerage said in a note to clients, adding that its model assumes that RIM disappears by 2020 in a gradual decline.

BlackBerry 10, considered to be RIM's make-or-break product, was originally slated to be launched in the first quarter and the delay has already contributed to a 40 percent drop in the company's stock price so far this year.

"Given RIM's cash burn, BB10 can't come soon enough," Barclays said in a note to clients.

Analysts at Citi Investment Research and Jefferies slashed their price targets on the stock to $5.00 for RIM's U.S.-listed shares, a fall of 45 percent from Thursday's close.

"We believe fundamentals continue to get worse and RIMM could run out of cash and need to raise capital within two years implying that as time rolls forward, if we are correct, the value of RIMM continues to go lower," the Citi analysts said.

"We expect more write-offs and impairments to RIMM assets and we question if RIMM's new BB10 products will even matter as it may be too little too late," the analysts said, adding that they expected the company's smartphone sales growth to be less than half of the industry average in 2012.

MARCHING OFF THE CLIFF

RIM said it would lay off 5,000 workers, about 30 percent of its workforce, as it tries to save cash, although some analysts noted that this would come at a short-term cost.

Citi said it believed the company should be hiring instead of firing to get its products out on time. "With the distraction of this large layoff, it will be difficult to retain and motivate employees to develop new products."

With a weak product portfolio and the BlackBerry 10 delay, RIM faces continued volume pressure as well declining average selling prices, said Credit Suisse, which cut its price target on the company's U.S.-listed shares to $7 from $11.

"While the stock remains cheap, only the potential for an outright sale of the company or a break-up keeps us at a "neutral" (rating)," the brokerage said.

RIM's board is under increasing pressure to consider unpalatable options such as selling its network business or forming an alliance with Microsoft Corp, three sources familiar with the situation said on Thursday.

Cannacord Genuity said it did not believe the launch of BlackBerry 10 would turn around RIM, which has come up short in competing with Apple Inc's iPhone and other devices using Google Inc's Android software. "...We believe RIM will need to sell the company," Cannacord said.

However, Baird Equity Research, under the heading "Marching off the cliff", said it believed there was no likely buyer.

CIBC cut its rating on RIM to "sector underperformer" from "sector outperformer." National Bank Financial, however, raised its rating to "sector perform" from "underperform", saying it was time to get off short positions.

RIM said on Thursday it lost $192 million, or 37 cents per share, for the first quarter ended June 2. Revenue declined 43 percent to $2.81 billion.

The company's shares, which have dropped about 70 percent over the past year, were trading at $7.55 in pre-market trading. The stock closed at $9.46 in Toronto on Thursday.

(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Tenzin Pema and Ted Kerr)

View the original article here

Read More