New Zynga titles struggle

Zynga's recent releases, Hidden Chronicles and Scramble With Friends, have failed to find the same success as Castleville and Empires And Allies.

A recent report from Cowen And Company shows that while Castleville and Empires And Allies could both boast 5 million daily active users ten days after release, Hidden Chronicles stands at just 710,000 after 12.

Scramble With Friends, the iOS title, currently stands at number 62 is Facebook's highest grossing charts. On day two of release, January 6, it only managed to reach 35.

Most Zynga titles peak within the three month period after release.

"We believe that Zynga's rich valuation can only be justified if Zynga is able to at least stabilise, if not grow, its overall social gaming audience," said the report authored by Doug Creutz and Jason Mueller.

It also identified a churn rate of around 20 per cent for Zynga's older titles, meaning the social gaming company will need to add between 9 million and 10 million DAUs per quarter from newer games to hold on to current levels.

"The quarterly rate of DAU decline for Zynga's titles that are at least three months old has averaged 18.4% per quarter for the last two years. Additionally, the rate of decline averaged 24.4% in 2H:11 as Zynga ramped its new title output, suggesting cannibalisation."

According to the figures, no Zynga titles released in 2011 exceeded 10 million DAUs.

"We believe Zynga will likely need several multiple-million DAU titles per quarter just to keep its overall Facebook DAUs from continued decline."

Cowen And Company maintained its Neutral rating for Zynga shares.

Zynga made an important hiring last week, snapping up EA's social executive Barry Cottle.