Last week, Electronic Arts (NASDAQ:EA) filed a lawsuit against Zynga (NASDAQ:ZNGA) for copyright infringement. The claim is that The Ville is a knock-off of EA’s The Sims Social.
If nothing else, this is another sign that the social gaming world is getting more brutal, especially as the growth starts to slow down.
Since reaching $16 per share in March, Zynga’s stock has collapsed to under $3 — a key reason being the company’s dearth of new blockbuster titles.
No doubt, Zynga has the resources to fight the case, but this should be little comfort for the company’s shareholders. The lawsuit is just another distraction for Zynga’s management. Worse, if EA does win, it could put even more burden on Zynga to come up with new games quickly.
– Tom Taulli, InvestorPlace