Zynga takes a bet with Cityville 2; beta just launched

Is it a good move for Zynga to go back to the well, or should they start looking elsewhere?

Just like the movies, sequels or prequels are often a less-risky endeavor for movie producers over launching an entirely new movie altogether. Taking a cue from the movies, it looks like Zynga is hoping to recapture Cityvile fans by coming out with a sequel.

Zynga is launching the latest game in its Ville series, a sequel to its 2010 hit CityVille entitled CityVille 2, it was announced on Zynga’s blog Monday.

Not many details about the new game were given, but here is what we know right now:

The new game, which is in closed beta, combine the features of CityVille, including neighbor visits and crews to buildables, with some features of CastleVille and Farmville 2, including crafting and 3D graphics.

“We’re committed to listening to our player feedback whether through focus groups, forums, play tests or betas, and hope this early beta will help us deliver the best possible social city game and bring players another way to connect with friends,” Zynga wrote.

More Ville games: good strategy?

Bringing out a new Ville game is either a brilliant strategy, or a move of pure desperation, for Zynga.

Zynga became famous for its Ville series, but just last week it was forced to announce that it was lowering its outlook for the remainder of 2012 due to the weakness of its Web games, including some on the Ville series.

In a preview of its financial results for the third quarter of 2012, Zynga said that it expected to report revenue in the range of $300 million to $305 million and bookings in the range of $250 million to $255 million. The company also said that it will be reporting a net loss of between $90 million and $105 million, with non-GAAP net loss between $2 million and $5 million.

Zynga blamed the bad numbers in the third quarter on “weakness of certain games in our Web ‘invest and express’ category” as well as “reduced expectations for certain Web games including The Ville, and delays in launching several new games.”

As a result of the downgraded outlook, Zynga's stock sunk 20% in after hours trading, then opened the next day down another 18% to $2.30.

The rough numbers for The Ville no doubt have something to do with a lawsuit leveled at Zynga by Electronic Arts, accusing the company of copyright infringement for allegedly ripping off EA’s The Sims Social.

The Ville is not the only game in the series underperforming.

CityVille surpassed Farmville in popularity only a month after it was release in 2010. At the time, CityVille had 61.7 million monthly users, just over FarmVille’s nearly 56.8 million.

Now, according to AppData, both games are attracting a shadow of their former audience. CityVille is down to 16.8 million monthly active users and FarmVille has 18.5.

So is it wise to release another game in a series that seems to be trending downward? The answer is not entirely clear.

Perhaps it is a good statregy, if some of the other games recently released in the series are any indication, as some of the other games in the Ville series seem to be doing quite well, actually . Zynga even touted some of the numbers in the same preview.

“We remain optimistic about the opportunity for social gaming and the power of our player network of 311 million monthly active users. When we offer our players highly engaging content, they respond. FarmVille2 has been our most successful launch since CastleVille in terms of daily bookings, and we now offer 3 of the top 5 most popular mobile games in the U.S. in terms of time spent according to Nielsen,” Zynga wrote.

FarmVille 2, which was released last month, currently has 33.5 million MAUs, and 7.4 daily active users, while ChefVille, which was released just last week, is on top Facebook’s App Leaderboard with 40.5 million MAUs and 4.3 DAUs. 

CastleVille, on the other hand, is less than a year old and already has less MAUs than the original FarmVille, with 17.3, and the same DAUs as the original CityVille with 2.2 million.

While the Ville games seem to be successful at first, their shelf life does not seem to be very long.

Zynga's other path

Perhaps the fickle nature of the Ville games is why CEO Mark Pincus touted Zynga's other game offerings in a note sent to employees last week.

"The challenges we faced in our eb business in Q2 continued in Q3 and while many of our games achieved plan, we still experienced overall weakness in the invest and express category. To address this we’re further investing in other genres like casino where we already lead with Zynga Poker and blue PVP, a category we pioneered with Mafia Wars, and now have the opportunity to reinvent with the industry’s best talent here at Zynga," Pincus wrote.

Zynga also recently went out an purchased mid-core game company A Bit Lucky for an undisclosed amount last month. 

By purchasing a midcore game company, Zynga was perhaps signaling that it no longer has faith in the casual games that were once its bread and butter.

Zynga’s stock was down 2.02% in regular trading, but is now up .41% in after hours trading. The stock is now worth $2.44 a share.

(Image source: https://blog.zynga.com)