Can 'FarmVille 2' save struggling Zynga?

Associated Press Modified: September 5, 2012 at 4:45 pm •  Published: September 5, 2012

SAN FRANCISCO (AP) — Not long ago, online games company Zynga looked on pace to unseat much bigger, well-established rivals as it rode the popularity of "FarmVille," the clicking game of virtual cows and real money.

But the iPad came along, and more people bought smartphones. People weren't playing Zynga's games on Facebook and computers as much as they used to. Zynga's revenue growth slowed down, and its stock price fell sharply, even as it released dozens of new games.

Now, the out-of-luck game maker is turning to a "FarmVille" sequel for a revival.

A lot is riding on "FarmVille 2," which Zynga Inc. released on Wednesday.

It's a total makeover for the simplistic, addictive, but oft-derided online diversion. It now has lush 3-D graphics instead of the old two-dimensional figures.

The game itself has added another dimension, too. Players can now interact with cute cartoon animals instead of simply "harvesting" them with endless clicks to obtain coins, as in the original "FarmVille." There's more collaboration than competition among farmers, something Zynga said its players have asked for. Instead of getting players to complete chores, it tries to lull them into an old-timey comfort zone.

"You are trying to bring an old family farm back into glory," said Wright Bagwell, director of design at "FarmVille 2."

Rather than make it frantic and stressful like many of today's shooter video games, the creators are hoping to evoke relaxation and nostalgia. The soundtrack consists almost solely of nature sounds.

"FarmVille" became a household name when it launched in 2009 and helped propel Zynga to the forefront of Facebook game makers. But investors are now questioning the company's long-term viability. Its stock is down some 70 percent since its December initial public offering.

"People often refer to Zynga as the 'FarmVille company.' This will be a key test to them," Baird analyst Colin Sebastian said. "They need another breakout hit."

But a lot has changed since 2009. The first iPad didn't launch until 2010, and smartphones were not as ubiquitous as they are today. In 2011, the first year the Pew Internet & American Life Project started tracking such data, 35 percent of Americans owned a smartphone. That has gone up to 46 percent.

Zynga faces some of the same challenges in the mobile world as Facebook, where most people play Zynga's games.

Computers reigned when both companies were created, but people are now migrating to smartphones and tablet computers in droves. While Zynga has some popular mobile games, it makes most of its money through Facebook Inc.'s website. Zynga has yet to prove it can reap the same revenue from iPhone and Android games.

How quickly things can change is underscored by the free-fall in Zynga's stock price since the spring, when it was trading above $14, higher than its IPO price of $10. On Wednesday, the stock closed at $2.92, just 26 cents above its all-time low of $2.66. Investors who own Zynga stock have sold it off in droves, spooked by declining user numbers and a worry that Facebook games were just a fad, with people moving on to playing on their iPhones and Android phones instead.

Soon after its launch, "FarmVille" became synonymous with online time-wasting. It spawned a generation of players — from teens to grandmothers — who zone out in front of their computers as they plant and harvest virtual crops and decorate fantasy farms with everything from gnomes to pink, sparkly fairy wing trees. The number of people who play "FarmVille" each month peaked in January with 34 million people, according to estimates from research firm AppData. As of this week, that number has dropped to about 18 million.

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