Zynga was the giant of social games a couple of years ago, but as that business tilts more towards smartphones and tablets, the company is struggling. Yesterday, Zynga laid off around 18% of its staff – 520 people – while closing offices in New York, LA and Dallas. It’s part of a new series of costcutting measures for the company, as it tries to refocus its business more around mobile games. Something that isn’t going entirely well: Zynga’s own press release admits that “while our Farmville Franchise continues to perform well, other games are underperforming”. CEO Mark Pincus added this in a note to staff: “The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.” Zynga’s downfall – and this is an important lesson for digital music services – came partly in its reliance on a single platform, Facebook, for its business. Also, Zynga’s growth was fuelled more by its ability to take advantage of Facebook’s viral mechanisms for marketing than for its ability to deliver a service (well, games) that people genuinely loved. When the marketing stopped working as well – partly because of changes to Facebook’s system, but mainly because the action shifted to mobile – Zynga started to struggle.

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