Zynga has reportedly seen a drop of its user engagement by 53 percent in the past three years according to a Dystillr report titled "Volatility in Zynga's Core Genre". An analysis of the company's stats shows that while players interacted with Zynga games 9.8 times per month in November of 2009, that number is now 4.6 times per month as of October 2012.
"The core of Zynga's challenge is its dominance in the simulation-type games, where it has a 58 percent market share," said Jay Aird co-founder of Dystillr. "Since January 2011, simulation games' share of Facebook game users has plummeted from 64 percent to 29 percent today."
The problem for the company comes from its core titles, which have always had the most traffic. Simulation games like FarmVille 2, CastleVille, and CityVille are down significantly over the past few years.
"Casual & Social Gaming is the fastest growing form of mass media of all time," said Aird. "What we are seeing now is an evolution in the space as the most iconic genres appear to have peaked while new genres and competitors have emerged to fuel new growth."
There is a silver-lining for Zynga, however. Their gambling and casino titles are still strong for the company and Zynga retains a 60 percent market share on Facebook in that genre. The gambling sector fro Zynga has grown nearly 100 percent in the past year, and if real-money gambling becomes legal in the U.S., it could become a huge windfall for Zynga.