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Zynga‘s stock price is rising today, and assessments of its third-quarter earnings performance are coming in from analysts. While positive signs provide some encouragement, they still worry about Zynga’s critical transition from desktop gaming to mobile.

In the analyst call yesterday, Zynga chief executive Mark Pincus blamed the earnings weakness on the poor performance of The Ville simulation game and the decline of Draw Something. Older games declined because Zynga didn’t create “enough heat” to keep players spending, while the new games didn’t bring in enough revenues to offset the declines. Pincus said that faster adoption of smartphone and tablet gaming also hurt Zynga. That’s because the mobile market is more competitive and Zynga isn’t anywhere near as dominant as it is on the PC-based Facebook market.

In trading today, Zynga shares are at $2.39 a share, up 12 percent from yesterday’s closing price. That gives Zynga a market value of $1.81 billion. The San Francisco-based company is probably worth a lot more than that, since it has $1.6 billion in cash and a lot of valuable real estate. But investors have been down on the stock since it blew up in the second quarter with a poor earnings report. A stock repurchase plan, better-than-expected earnings (based on reduced expectations after a warning), a 5 percent layoff, and a real-money gambling alliance with bwin.party are likely lifting the stock.

“We’re focused on driving profitability and growth in our core web business,” Pincus said in an analyst call yesterday. He said Zynga now has the No. 1 mobile gaming audience in the Western world and it has the No. 4 mobile network in terms of all apps the U.S., reaching 30 percent of all U.S. smartphone users.

Michael Pachter, an analyst at Wedbush Securities who specializes in the gaming market, said the third-quarter results were in line with the latest expectations and that Zynga now has sufficient control of its expenses to return to profitability. He expects a loss in the fourth quarter and a recovery after that. Pachter is targeting a 12-month share price of $4, or twice the amount of cash and real estate Zynga has.

Atul Bagga, an analyst at Lazard Capital Markets, said the $200 million share buyback program that Zynga announced yesterday could help prop up the stock price. He doesn’t think real-money gambling in the United Kingdom would help the company’s 2013 financials much, but it could also create a positive sentiment for the stock.

“While we believe that Zynga has a number of credible assets that could help its position in mobile and rebound in web, we remain concerned on the employee turnover which we believe risks execution in the near term,” Bagga wrote in a research report.

Since its weak second quarter earnings report, Zynga has lost its chief operating officer John Schappert and a number of other executives and high-profile game creators. This week, the company laid off 150 people, or 5 percent of its work force, and it is shutting down 13 older games. The layoffs could reduce spending by $15 million to $20 million a quarter.

Bagga noted that Zynga’s mobile ad revenue was $31 million, up 69 percent from a year ago, thanks to a new ad format that includes video ads, which were up 142 percent from the previous quarter. But Draw Something’s weakness meant that mobile revenue was down from the previous quarter.

Colin Sebastian, an analyst at R.W. Baird, said, “Share repurchases and the real-money gambling partnership are positive steps, although neither one really alters the fundamental challenges the company faces with its games on Facebook.”

In a research note, Sebastian wrote that Zynga needs to demonstrate it can produce hit games on multiple platforms: mobile, social, and browsers. He noted existing games have shown decay in revenues, and some app fatigue persists. That suggests a need for diversification. Mobile bookings are now 20 percent of the total, but in part because of the decline in Facebook gaming, he said. A smaller number of users appear to be driving a larger part of revenues. That suggest there is limited opportunity to squeeze more money out of the existing players. The number of paying customers is now 3 million, down from 4.1 million payers in the previous quarter.

Ben Schachter, an analyst at Macquarie Capital, said that the transition from desktop to mobile is a key one for Zynga. He remains neutral on the stock.

“As users migrate to mobile, Zynga has neither first-mover advantage nor, so far at least, sustainable execution,” he wrote in a research report. “We are simply not willing to give them the benefit of the doubt until we see proof of execution. Stated another way, we attribute very little value to their core game business until they prove that it can be run profitably.”

Overall, Zynga has 311 million monthly active users who generate 700 million social interactions a day — more than Google’s interactions in a day, Pincus said. FarmVille 2 has grown to more than 61 million monthly active players while ChefVille has topped 27 million. FarmVille 2 has 500,000 unique buyers (those who pay real money for virtual goods in the free-to-play game), and on one recent day, Zynga says they spent $950,000.

Zynga is planning to launch a sequel to CityVille soon, and it will debut real-money gambling in the United Kingdom with bwin.party in the first half of next year. Zynga plans to release two web games and four mobile games per quarter, not counting third-party titles. There are 18 third-party games on Zynga.com now, and more are coming.

It remains to be seen how that real-money gambling effort will fare. Zynga didn’t describe the gambling effort much. But we hear that Zynga is reportedly going to put its name on a number of bwin.party games so that the games do not have to be re-certified by gambling authorities. That’s not necessarily as good an option as creating brand-new games produced by Zynga’s staff. But to do the latter would be tough since it requires regulatory review and would mean a smaller share of the overall revenue pie for Zynga. It recently hired Maytal Ginsburg Osha, a veteran gambling executive, to sort out its online gambling strategy.

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