Don't understand why this thing is valued so highly (overall market cap). I've seen the graphics and they appear to be borderline childish to me. If these games were on Playstation or XBOX they would be horrible sellers.
Save your statement, and re-read in a year, or maybe in 10.
You'll be shocked at just how little you understood about Zynga, and their social gaming movement.
You are not alone. I don't believe the street will ever understand Zynga.
I'm 29 years old, and grew up on nintendo, playstation etc. I am a gamer. I think these games are absolute crap, and they are, but that is totally missing the point. These are not gamers, these are something completely new. They are "social gamers", for a lack of a better term, and the people playing these games, probably were never really into video games.
My take on Zynga is it's an addicition stock as weird as it sounds, like MO, or LVS..
Most people that download these free games, will play them for free, never giving Zynga one penny, except for a really small portion of advertising revenue, that is basically worthless in the big picture.
There is a small percentage of people who spend hundreds of dollars a month, yes I said hundreds a month, on virtual goods. Only two kinds of people would do this, rich people, but more likely addicted people.
A couple good articles came out today addressing this "Whale" situation, where most of Zyngas profits come from a very select few who over spend. I don't really see this as a bad thing, as long as the money comes in.
Don't be surprised if in a couple years you see a big piece about the dangers of social gaming on 60 minutes, and see help groups popping up.
It's this addiction that will drive Zynga, and social gaming going forward.
I zero problems making money off addicition stocks, but I have many concerns about Zynga's business model, and it's sustainability going forward.
If those got answered, and stock built a base, I'd consider this one as a spec stock.
ZNGA will either end up being a steal, and make you 10x your money, or go flat broke. There's no in-between with this one.