Zynga filed for IPO and totally revealed its bubbleness two days ago. The figures turned out to be even worse than what was anticipated. The average net income in 2010 turned out to be $7.5m instead of $15m, and Facebook started taking its 30% cut only during the 2nd half of 2010. This year started off even worse: $11.8m of net income for Q1 of 2011.
The most grave news however is a lack of growth in the key metrics: all of them (DAU, MAU, and MUU) are essentially the same when comparing Q1 2010 and Q1 2011. While the revenue is higher, it will stagnate without growing user base. Apparently, Zynga realizes this too, that’s why they are in a rush for IPO. The time is not working in their favor.
UPDATE: here is what Zynga says about the 30% cut: “In July 2010, we began migrating to Facebook Credits as the primary payment method for our games played through Facebook, and by April 2011, we had completed this migration.” So, it is safe to assume that Zynga wasn’t leaving 30% of their revenue to Facebook for the most of 2010. That’s why income in 2011 is down by 50%.