Zynga suffered 8.2% drop in DAUs during May - analyst

Social games giant Zynga suffered a second consecutive significant drop in daily active users for its Facebook games during May, with nearly all of its major titles declining in user numbers. According to Doug Creutz from analyst firm Cowen, Zynga's DAUs declined by 8.2 percent in May month-over-month, leading Creutz to believe that Zynga's strategy of accelerated game releases coupled with a churn of its existing user fanbase is having a negative impact on its overall business. This is all despite the successful launch of Zynga's latest Facebook title Bubble Safari, which added 5.7 million DAUs to the company's tally in its first month. In particular, Creutz says that more casual gamers are migrating from the churn of Zynga's Facebook games to mobile games, which are more attractive given that the game quality is usually better than that of Facebook games, and that mobile games can be played at any time, anywhere. "While Zynga is aggressively pursuing mobile game development, its biggest advantages of scale and cross-promotion remain largely confined to the Facebook platform," notes Creutz. However, he also says that it isn't just Zynga who is being affected by the transition. Both EA and Disney also suffered notable month-over-month declines in DAUs, and only three of the titles in the top 20 games on Facebook grew in DAUs during May. [Update: Following Cruetz's unfavorable comments, Zynga's already battered share price plummeted by more than 11 percent, falling just below $5 -- when the developer went public in December, its shares were priced at $10.]