Betting the farm: Zynga doesn't get mobile, slashes workforce

Zynga has decided on a radical restructuring programme and has seen its share price driven down by around 15 per cent to close on $2.99. That means the company, so recently one of the shooting stars in the digital firmament, is now worth a 'mere' $2.7 billion, down from over $7 billion a year ago.

But wait. That $7 billion was itself a puny bagatelle in comparison to the $20 billion the hype machine was trying to tell the market Zynga was worth in the run-up to its flotation in 2011.

In the event the usual pattern asserted itself soon after flotation. The Zynga share offer went out the door in late 2011 at $10 per share, briefly made a suicide dash towards $15 and then dropped steadily from April last year as the company's bloated expectations met reality.

The problem is the old familiar one. Being based on Facebook and Facebook being based on the desktop (essentially) Farmville hasn't made the journey to smartphone and tablet. Although it is available on Android and on Google+ it still makes most of its money from Facebook and that pie is apparently shrinking as well.

Instead, users have found other 'cooler' games which you can play on your smartphone - many of which don't demand money for virtual goods.

Meanwhile, despite a bloated payroll (currently well over 2000 employees) and lavish spending on other games studios, Zynga has been unable to concoct any more FarmVilles.

Was this something completely foreseeable? No, but it or something like it was clearly the most likely medium-term outcome for Zynga and FarmVille. Games are fads. They are anchored to a particular time and place like a good pop song. And like a good pop song they peak and fade.

Zynga has announced a cut-back programme. It will slash about one fifth of its workforce and close several of its development studios in an attempt to staunch the outward flow of cash.