Zynga increases revenue despite losing more gamers

James Nickerson
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Zynga exceed revenue expectations despite a slide in users (Source: Getty)

Zynga's revenue rose in the second quarter of 2015 as net losses narrowed despite a fall in users.

The figures

The gaming company’s net loss narrowed to $26.9m, or $0.03 per share, 57 per cent down from a year earlier when it stood at $62.5m. This also improves upon the $0.07 loss per share a year ago.

The company’s second quarter revenue rose 30 per cent year-on-year to $200m.

However, daily active users declined 23 per cent year-on-year to 21m, as well as falling 15 per cent from last quarter.

Zynga generated $174m in total bookings, a four per cent increase on last quarter.

Why it’s interesting

This is Zynga’s first full quarter with Mark Pincus as chief executive, returning in April to replace the CEO he had originally found.

The company managed to beat expectations for earnings and revenue despite having trouble attracting users. Daily users have declined 23 per cent year-on-year to 21m. Monthly active uses also fell 32 per cent to 83m year-on-year. Last quarter the company had 100m monthly active users and 25m daily active users.

However, the message moving forward is upbeat. The company said it has implemented a $100m cost reduction plan and is developing new games, as well as having secured a multi-year agreement with Warner Bros. Interactive Entertainment to license the Willy Wonka and the Chocolate Factory brand.

The company also said: "Our second quarter results reflect the progress we continue to make in mobile where bookings have grown to $115m which is 66 per cent of total," as they hope to expand across mobile.

Oh, and they've brought Frank Gibeau on board, a former EA executive and seasoned gaming industry executive.

What Zynga said

Chief executive Mark Pincus said:

Our third quarter guidance range reflects the continued investments we are making. In the third quarter we expect bookings to be in the range of $155 million and $170 million.

Going forward, we will focus on balancing investment in our future with resourcefully managing our costs in order to maximize long term profitability and value.

We will continue to invest in our new game pipeline and live games with a disciplined approach that is accretive and ROI positive in the mid to long term.

In short

In the first full quarter with Mark Pincus back in the CEO role, the company increased revenue despite the number of gamers sliding.

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