Analysts are taking another look at the online social games industry after Zynga missed the mark in its second-quarter earnings report. The San Francisco-based creator of such popular online games as FarmVille and Mafia Wars had a dizzying market capitalization of $8.5 billion after its IPO last December. That has fallen to $2.21 billion following its latest results and outlook announcement last Wednesday. The firm’s second-quarter revenues were $332 million, lower than analysts’ expectations of $343 million.

The company, which claims 60 million daily active users, also lowered projected bookings for the year (the amount users pay up front for virtual goods they consume while playing) to between $1.15 billion and $1.23 billion from an earlier forecast of $1.47 billion. Zynga blamed its setbacks principally on “delays in launching new games [and] a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform.” The firm’s share price has plummeted from about $15 in early March to about $3 at Friday’s close.

Zynga mainly hosts its games on Facebook, although recently the company began offering games on its own site to reduce its dependence on the social network giant. “Zynga can’t afford to put all its eggs in Facebook’s basket, but neither can it live without the enormous push that it gets from its Facebook relationship,” said Wharton professor of legal studies and business ethics Kevin Werbach in a previous Knowledge at Wharton article about the game developer’s prospects.

According to Eric Clemons, a Wharton professor of operations and information management, Zynga’s real problem is the lack of staying power that its products seem to have. He compares social games by Zynga and others to a fad like pet rocks — plain rocks that were sold by the millions in 1975 as “pets” in boxes before they quickly faded from view. In a bid to boost revenues, Zynga recently partnered with toy maker Hasbro to merchandise its games, but Clemons isn’t impressed by that, either. “Pet rocks were not followed by pet erasers” or other merchandising that were able to extend their lifecycle in any way, he notes.

Clemons points out what he sees as another shortcoming in Zynga’s business model: FarmVille players have to pay for plants, livestock or tractors to cultivate their virtual farms. “FarmVille never made any sense to me,” he says. “I have no use for games where you pay to improve your performance.” It could serve its purpose as a transient distraction from boredom, he concedes, but predicts that fickle users will require new distractions to keep them engaged. In fact, CityVille, which was launched after FarmVille, has already eclipsed FarmVille’s popularity, and the firm launched six new games last quarter.

In the previous Knowledge at Wharton article on Zynga, Wharton emeritus management professor Lawrence Hrebiniak warned of that very challenge. “Zynga’s business model depends on developing cool games and new titles to replace older ones,” he noted. “How long can Zynga do that? By the time [its] Facebook deal expires, Zynga may not be viable.”