Saturday Social: Zynga Revenue Falls, Microsoft Shares Drop
Zynga revenue falls, Ubuntu Edge seeks funding, Samsung reports record quarter, Microsoft shares drop 7%, awkward moment on plane
Social gaming giant Zynga saw shares fall 14% this week, following a sharp decline in both players and revenue compared to last year. The company said that they will now abandon plans to develop games that use real money.
Zynga’s monthly users are now 40% less than last years and its revenue has dropped by 38% in this quarter, compared to the same time in 2012. In the last quarter to the end of June, gamers playing daily dropped by 45% to 39m.
The company believes that it’s time to “get back to basics” and concentrate on free to play social games from now on.
“While the company continues to evaluate its real-money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States,” Zynga said in a statement.
Last month the firm cut 520 jobs, representing around 20% of its workforce, as it has struggled to get games into the Facebook top ten. Recently it also emerged that King, the maker of Candy Crush Saga, had overtaken Zynga in terms of monthly player numbers.
Zynga has also struggled to make any significant impact with Draw Something 2.
Introducing the Ubuntu Edge
Any geek worth his salt will be intrigued by the (hopefully) upcoming release of the Ubuntu Edge smartphone, which makers Canonical said this week they are hoping to raise $32,000,000 for with crowdsourcing.
So far, the device has attracted $6,551,370 on indiegogo and there is still 27 days left to go, for those interested in contributing. The target figure is more than any other firm has ever tried to raise through crowd funding.
Those that choose to ‘invest’ in the project are offered various rewards, depending on the amount that they donate, ranging from a cut price phone to 100 units.
What makes the Ubuntu Edge different is that it will have power similar to that of a desktop machine, with 4GB of RAM and 128GB storage. While the phone will look and feel like a standard phone, when docked with a monitor, it will change to look like a desktop.
It’s thought that the device will also have a 4.5” screen made from durable sapphire crystal and will be able to boot into Android as an alternative OS to Ubuntu. This means that it will already be compatible with a good proportion of apps already on the market.
“I would describe today’s devices as being more useful as a thin client… offloading most of the processing to the cloud,” Canonical’s Mark Shuttleworth told the BBC.
“What we’re interested in is the next generation, giving you enough horsepower to actually have the full desktop experience powered by the phone.”
“We designed the interface to create a beautiful home screen that’s free from the usual clutter. You navigate by swiping over an edge of the screen: open your favourite apps on the left edge, switch instantly between open apps from the right, and use the system and app toolbars at the top and bottom respectively. It’s so simple, Ubuntu doesn’t need a home button at all.”
Whether or not the device will be able to gain any traction in the hyper-competitive smartphone market remains to be seen though, especially as Canonical have yet to raise the necessary funding.
However, it seems fair to assume that Linux fans will be more than interested in a Linux-based device, so it could perform relatively well.
Samsung reveal record profit
Talking of the smartphone market, Samsung has reported a record quarterly profit which has been fuelled by smartphone sales and a boost in its panel display division.
The company saw a total net profit of £4.5bn, which is a huge 50% more than this time last year. The launch of the Galaxy S4 is thought to have been a key driver behind the growth of the company’s smartphone sales.
“Entering into a typically strong season for the IT industry, we expect earnings to continue to increase,” said Robert Yi, head of investor relations at Samsung.
“However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products.”
According to the BBC, Samsung has now overtaken Nokia as the biggest mobile phone manufacturer in the world and Samsung devices account for a whopping 95% of the Android market.
Microsoft shares drop 7%
It’s very much a mixed bag this week when it comes to the technology industry as Microsoft also released quarterly figures which led to a 7% drop in shares. It’s thought that disappointing sales of the Surface RT has contributed to falling profits.
However, the Q2 results fell short of expectations, even taking the poor performance of Surface into account, it’s thought.
Last week Microsoft announced that it will cut the cost of its tablets, which have forced the company to add a £591 million charge for inventory write-downs. While the firm has seen revenue growth of around 11%, operating revenue is down 5% on last year.
Office performed well, but revenue for Windows has fallen significantly by 16% as PC sales continue to decline and the Online Search and Entertainment & Devices divisions also both lost money.
“It doesn’t inspire a lot of confidence,” Nomura Securities analyst Rick Sherlund said.
“[Microsoft is] in the hardware business now, and pretty shortly after entering it you have a pretty big writedown. That’s embarrassing.”
Microsoft has had a year of criticism, with some blaming the launch of Windows 8 for falling PC sales. It’s more likely to be a combination of factors, such as the rise in popularity for tablet devices though.
Next month, a revised version of Windows 8 (8.1) will go on general release and it’s hoped that this will help to boost profits and make the Windows division the “money-making machine” that it once was.
Facebook also released its quarterly financial report this week and showed record profits, with 42% being made up by mobile advertising. Shares in the company subsequently soared to $34 a share, leaving some Wall Street analysts with red faces after they said mobile advertising would never work for the social network last year.
That awkward moment when…
This week saw a video of a woman falling asleep on a plane go viral, as the guy she used as a pillow decided to capture it on his phone. At one point the lady has her head in the poor guy’s lap, and he looks suitably terrified.