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Zynga's expanding game lineup drives revenue growth for fiscal first quarter

Social game giant Zynga beat analyst expectations with $321 million in revenue for the quarter, driven by new games and the launch of the Zynga Platform - although the Draw Something publisher lost $85 million on a GAAP basis.

Tom Curtis, Blogger

April 26, 2012

2 Min Read

For its latest fiscal quarter as a publicly traded company, social gaming giant Zynga beat analyst expectations with a significant jump in both revenue and monthly active players, influenced in part by Zynga's rapidly expanding game catalog. For its fiscal first quarter ended March 31, Zynga reported revenues of $321 million, up 32 percent year over year, and beating average analyst estimates of $317.25 million. Its online games alone generated $292.8 million of that sum, while ad revenue made up the remainder. Despite the increase in revenue, however, the company endured losses of $85.4 million on a GAAP basis, down from a profit of $16.8 million during this period in 2011. The loss was somewhat expected, as this quarter Zynga spent roughly $180 million (plus $30 million in employee retention payments) to acquire Draw Something studio Omgpop. Alongside these financial results, the company also saw its monthly active users increase to 292 million, up 24 percent from this time last year. A significant part of this increase was attributed to the fact that Zynga debuted six new titles during this quarter, including Draw Something, Scramble With Friends, and Hidden Chronicles. During its quarterly earnings call, Zynga COO John Schappert said the company accomplished three major goals that drove its growth this quarter. "We tackled new game genres, we became a leader on the mobile charts, and we launched the Zynga Platform," he said. That platform, which launched just last month, allows players to access and play Zynga titles without going through Facebook. In an SEC filing earlier this week, Facebook reported that 14 percent of its income came from advertising and payment processing fees related to Zynga's social games -- a marked decrease from the estimated 19 percent contribution for that same period in 2011. Facebook noted that Zynga's new platform could help the social developer become less dependent on other networks, thus further reducing its contributions to other companies. Zynga also noted that its older titles, like FarmVille and CityVille, also performed well during the quarter. "The total bookings [revenue and pending customer payments] from games that where more than a year old was approximatley 80 percent of what those games delivered in the first quarter of 2011," said company CFO David Wehner. "The key takeaways here are two fold. One, we had a stable base of bookings from existing games, and two, there's not always a direct correlation between bookings and publicly available DAU [Daily Active Users] data, which showed a steeper decline year over year." Looking ahead to the full 2012 fiscal year Zynga expects bookings of between $1.425 billion and $1.5 billion.

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About the Author(s)

Tom Curtis


Tom Curtis is Associate Content Manager for Gamasutra and the UBM TechWeb Game Network. Prior to joining Gamasutra full-time, he served as the site's editorial intern while earning a degree in Media Studies at the University of California, Berkeley.

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