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Zynga sees earnings rise for the second quarter in a row

Zynga sees earnings rise for the second quarter in a row

November 7, 2017 | By Alex Wawro

Social and mobile game company Zynga reported earnings for the third quarter of its fiscal year today, and the numbers look good: revenue and profits were up year-over-year, thanks in large part to the company's "forever franchises" like Words with Friends and Zynga Slots.

Notably, Zynga claims that the $224.6 million in (GAAP) revenues brought in during the quarter was above its forecast and the best it's generated "in over four years." The company reported a profit of $18.1 million on that revenue, which also beat its projects and seems much better than the $41.7 million loss it reported during the same period last year.

This is the second quarter in a row that Zynga has reported a profit, which is significant when you consider that the company had been reporting significant losses for quite some time. As it did during the last quarter, the company chalks up its turnaround to strong performance by its mobile games: 87 percent of its revenue now comes from mobile, especially long-running games like Zynga Poker, Words with Friends and CSR Racing 2.

To expand its foothold in mobile games, Zynga noted in its earnings report that it has made a $100 million cash deal to buy a chunk of Istanbul-based Peak Games: specifically, the studio's mobile card and board game business. Thus, Peak games like Gin Rummy Plus and Spades Plus will become part of Zynga's portfolio once the deal passes final muster.

Furthermore, Zynga says it has plans to develop and release more "Action Strategy", "Casual", and "Invest Express" (think: FarmVille) games in the months ahead, even as it launches Words with Friends 2 this week. The company is also touting a deepening focus on mobile augmented-reality projects, noting in its letter to investors that it will be adding an AR component to CSR Racing 2 this month that will allow players to superimpose virtual cars onto the real world.

"With respect to AR, we’re excited by how it’s captured the imagination of gamers around the world," reads an excerpt of the letter. "Apple’s ARKit and Google’s ARCore will allow the teams at Zynga to create innovative new augmented reality experiences."

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