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Social gaming giant Zynga now worth more than EA

Additional reporting by GamesRadar staff

According to Bloomberg, the stock value of social games producer Zynga has surpassed that of Electronic Arts, the second largest video game publisher in the world (behind Activision Blizzard.) The Farmville creators are now valued at $5.51 billion, compared to EA's $5.22. Both are less than half of Activision Blizzards $13.9 billion, which is itself small compared to Tencent Holdings of China's $43 billion.

The news is a nice feather in Zynga's cap, but industry followers should be careful not to assume this news indicates that that EA is failing in the marketplace. While the publisher has been hit hard and forced to reduce staff at several major studios, it isn't going anywhere anytime soon.


Above: YOU MUST PLAY IT ALL THE TIME

Irate hardcore gamers may see this news as a threat to their hobby, and they aren't alone - Bloomberg reporter Ari Levy calls it "a sign of the ascendance of social-networking entertainment at the expense of traditional video games."

Levy continues, "[Electronic Arts] faces declining retail sales of gaming hardware and software. More consumers would rather play online and social-networking games, rather than heading to a store to buy a shrink-wrapped program. That’s forced Electronic Arts to cut jobs and seek acquisitions for growth. Its shares have dropped 6.3 percent since March 1. Zynga’s estimated value has more than doubled in that period."

We're not sure what statistics make the connection between Zynga's success and EA's decline - no data is cited in the article. Didn't a stats teacher once tell us that correlation does not imply causation?

Our mothers' FarmVille obsessions don't seem to come at the expense of "traditional" games. The franchises we love aren't dying because of Facebook, the iPad, and Kinect. Fantastic indie game designers aren't slowing down, they're growing in ranks. Granted, we are totally unqualified as industry analysts, so y'know, maybe Bloomberg is right.

But it seems to us that the rise of social and mobile gaming could be good news for hardcore gamers. More social games means more interest in gaming, leading to more hardcore gamers in the future, leading to increased market demand and more hardcore games. Everybody wins? We'll just have to watch and find out.

[Source: Bloomberg.com]

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10 comments

  • Ensoul - October 28, 2010 5:40 a.m.

    @BadCompanyBrik True enough. Don't get me wrong I'm an active player in Mafia Wars but I haven't spent one dime on the game. If people want to spend money on it they can, I just don't get it.
  • CoryRX8 - October 28, 2010 4:10 a.m.

    This tells you just how stupid the stock market really is. This value is all artificial, and when the next big fad appears Zynga's stock will plummet to almost nothing. Once you take into account "little" things like price to earnings ratio, you'll see that this overly inflated value isn't backed by anything. Only a fool would invest in this company; fortunately for them, there are a lot of fools on Wall Street.
  • Kenzo - October 28, 2010 2:32 a.m.

    AHAAHAAH AHAHAAHAHAHAHAHAHAH AHAHAHAHAHAHAH AHAHAH AHHAHAHAHA I CAN'T FRICKIN BELIEVE IT. hahah that had to have been a hilarious announcement at EA hq. "Well it seems that the farmville creators are now worth more than we are, oh crap i gotta check my crops!"
  • Robx - October 28, 2010 1:52 a.m.

    So THIS is what Apple's going to buy...
  • BadCompanyBrik - October 28, 2010 12:03 a.m.

    @Ensoul Not that I think social games require more brainpower than, say, Civ 5, but you can say that about any game.
  • Jesse1066 - October 27, 2010 11:56 p.m.

    AAAAAAAAAAAAAAAAAAAAAAAAAAAHHHHHHHHH!!!!
  • gopikmin - October 27, 2010 11:01 p.m.

    and not a single cent is from me
  • GammaGames - October 27, 2010 10:53 p.m.

    Yes, you must play it all the time!
  • BillyBrush - October 27, 2010 10:08 p.m.

    Doesn't matter what it's worth....no one would want to buy it as an investement, not at that price. (perhaps someone's getting a big valuation out because Mr Apple has change to spend?) I'm sure it's making the people who set it up an absolute fortune, and good for them, combining simple internet games with the power of social networking and clever economic systems....equals lots of money. It's a shame though that somewhere there exists some poor soul who has spent £400 on Farmville....oh well, there are about 4 million who've probably payed over a grand to play a single game (warcraft)...but they love doing such an insane thing, it's a fee world, if someone wants to give away their money...
  • Ensoul - October 27, 2010 10:02 p.m.

    It's clicking. Delayed clicking at that if you don't pay.

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