Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
October 31, 2014
arrowPress Releases
October 31, 2014
PR Newswire
View All

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Zynga Profits, Users Decline Ahead Of Proposed $1B IPO
Zynga Profits, Users Decline Ahead Of Proposed $1B IPO
September 22, 2011 | By Frank Cifaldi

CityVille and FarmVille developer Zynga's growth finally slowed down during its June quarter, the company revealed Thursday.

Ahead of an estimated $1B initial public offering (which is being delayed due to "rocky stock markets"), the company revealed its financial performance for the quarter in an SEC filing, showing that its year-on-year profits declined around 95 percent, from $27.2M to $1.3M.

The company's revenues continued to grow, though at a slower pace: the $279.1M it generated in its quarter ending June 30 was 15 percent higher than the $242.9M it saw in its March quarter. By comparison, March revenues were up 24 percent from those in the previous quarter.

One important metric for Zynga is its "bookings," the term used to define revenues from both microtransactions and ads if measured immediately at the time of sale before any adjustments -- such as the 30 percent Facebook Credits take -- are made. This is, in a sense, the company's measurement of virtual goods sales.

Bookings for the quarter were down for the first time in company history. The $274.7M it reported is a 4 percent drop from the $286.6M in the prior quarter.

That 4 percent drop could easily be explained by a decline daily active users during the period: quarter-to-quarter, DAUs dropped from 62M to 59M, or roughly 4 percent, due to a more competitive market than in prior quarters.

Zynga attributes its profit decline to two major factors: the company did not launch any new games in the first half of 2011 until Empires and Allies on March 31, and the company spent more than it traditionally had on hiring, acquisitions, and its international growth.

Its transition to the Facebook Credits system also hurt profits, the company said.

As part of today's filings, the company said that recently-conducted third-party analysis puts the probability of its IPO at 75 percent, down from 80.

However, that same analysis increased the company's valuation, from $13.98B to $14.05B.

Related Jobs

InnoGames GmbH
InnoGames GmbH — Hamburg, Germany

Mobile Developer C++ (m/f)
The College of New Jersey
The College of New Jersey — Ewing, New Jersey, United States

Assistant Professor - Interactive Multi Media - Tenure Track
Next Games
Next Games — Helsinki, Finland

Senior Level Designer
Activision Publishing
Activision Publishing — Santa Monica, California, United States

Tools Programmer-Central Team


Caulder Bradford
profile image
Here today...

steve roger
profile image
This is good news. This company is one of those that spams the internet hoping to hijack a potential customer.

Quan Ngo
profile image
I wonder when will social gaming bubble burst happen...

Alan Rimkeit
profile image
1 billion for Zynga. How stupid. Over valued beyond compare is being kind. Bubble says "pop" soon.

Andrew Heywood
profile image
Whatever your opinion on Zynga, I'm not sure it's much of a stretch that a company turning over almost $300m a year would have a market cap of $1bn.

Eric Geer
profile image
Since Facebook made it's terrible interface changes recently and google+ becoming available to all. I would suspect many people are going to be migrating to google+ and Zynga might take a huge hit from this--unless they are involved with google+---I'm not sure--anyone?

Eric McVinney
profile image
Though Zynga has a 5 year contract with FB (IIRC), I have heard "rumors" that they had prospects of jumping on with G+

Jane Castle
profile image
Zynga CEO: Our Pump and Dump plans for the company have hit a snag.....

Tim Hesse
profile image
I find it very interesting that my previous post in reply to this topic has been deleted...

Ralph Wells
profile image
I am going to party hard when Zynga goes down in flames. Nothing good for the game industry has ever come from Zynga.