Zynga shares fell after a record rise. It's all about Apple's new policy

iOS 14 has not yet been released, and Apple has not yet tightened its policy towards IDFA, as the gaming market has already felt the consequences of the upcoming changes. Shares of Zynga Studio fell by 4.86%.

The start of trading on Tuesday on the US Nasdaq exchange was not the most pleasant for Zynga. Berenberg analysts assigned the company’s securities the status of “buy” instead of “hold”, and the share price rapidly crept down.

What does Apple have to do with it?

Two months ago, Apple announced iOS 14, which will significantly change the policy of transferring user data. In short, users will be able to prohibit applications with the device identifier for advertisers (IDFA) from collecting information about them. This information helps advertising companies to show users the right ads for them, and traffic buyers — the right audience. However, there is a concern that many users will now not want to share data with companies, and this will negatively affect the industry.

According to analyst David Beckel, such changes “will have a huge impact on Zynga’s business.” The studio’s advertising revenue will be seriously reduced because Zynga will not be able to collect as detailed information about users as before.

In his opinion, in the near future Zynga will be forced to temporarily stop doing mergers and acquisitions to compensate for losses from Apple’s innovations. Although only this year the studio made two major purchases: Rollic and Peak Games.

Recall that during the year, the company’s securities showed good growth (48%), and revenue in the period from January to the end of June amounted to $855,455 thousand ($571,903 thousand in the same period of 2019).

Zynga is a studio that has developed CityVille, FarmVille, Mafia Wars and dozens of other online games.

Also on the topic:

• Zynga bought the Turkish studio Rollic for $168 million. This is the company’s second major deal this yearThe advertising market on iOS is waiting for shocks.
• Apple’s “blow” on IDFA is to blame for everythingHow will Apple’s new IDFA policy affect the advertising market: the opinions of Adjust, AdQuantum and Digital Turbine
• How Apple’s new IDFA policy will affect the market: opinions of gaming companies
• Is there any news?