Zynga Is Still Being Fueled By ‘Words With Friends’

The effect of Pokemon Go, however, The Know It Guy  remains to be seen.
FarmVille creator Zynga reported higher-than-expected bookings in the second quarter, driven by higher demand for its slot games and social games such as Words with Friends and Zynga Poker.

The company said bookings were $175 million in the three months ended June 30. Analysts on average had expected $171.3 million, according to research firm FactSet StreetAccount.

Bookings, an important metric indicating future revenue, include the sales of virtual goods such as currency and lives.

The company during the quarter launched games such as Spin It Rich! Slots, Ice Age: Arctic Blast, and Wizard of Oz: Magic Match. The company’s long-delayed mobile racing game CSR 2 launched at the end of second quarter.

“We still have got a lot a work to do. We are not declaring victory or getting too ahead of ourselves here,” Chief Executive Frank Gibeau told Reuters.

Zynga ZNGA -0.35% , whose FarmVille once dominated games played on Facebook FB -0.51% , named Electronic Arts EA -0.90% veteran Frank Gibeau as chief executive in March to spearhead its transition to a mobile-focused games maker.

Gibeau—who replaced founder Mark Pincus—has a track record of managing EA’s mobile franchises such as “Plants vs. Zombies” and getting games shipped on time.

He said the launch of Pokemon Go had no positive or negative impact on the company, but added it has brought new people into mobile gaming.


Pokemon Go, which released in the United States on July 6, has become a global phenomenon, sending players into city streets, offices, parks, and restaurants to search for colourful animated characters.

Gibeau said the company was also working on some projects in augmented reality, virtual reality, and wearables.

However, Zynga’s average daily active users fell 14.3% to 18 million from a year earlier.

Gibeau said most of the decline was driven by some of the legacy mobile games.

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The company’s net loss narrowed to $4.45 million from $26.87 million a year earlier. Total costs and expenses fell 17.2%.

Revenue from advertising rose 21.6%, and accounted for 25.3% of total revenue.

The company forecast third-quarter bookings in the range of $180 million-$190 million, largely below the average analyst estimate of $188 million expected by FactSet StreetAccount.

Zynga is on track to launch 10 games this year, with the second half of the year featuring titles such as FarmVille: Tropic Escape, as well as another delayed action-strategy game, Dawn of Titans.

Separately, the company appointed Matt Bromberg as chief operating officer, with whom Gibeau has worked with in the past.

Up to Thursday’s close of $2.97, shares had risen 11% this year.

Dennis Bailey


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