Zynga Seeks Turnaround as Q4 Numbers Emerge

By Steve Anderson February 06, 2013

Zynga hasn't exactly been having an easy time of things in the last few months, and while the numbers are showing some signs that the company isn't out of the game just yet, it's also going to have quite a time trying to make a comeback fully realized.

The firm has released its fourth-quarter numbers, and they show something of a mixed picture.

One of the biggest items on the roster of fourth quarter announcements was that full-year 2012 revenue was $1.28 billion – up fully 12 percent over the same time last year. But bookings came in at $1.15 billion, down 1 percent on the year. Zynga reported a full year net loss of $209 million, with a GAAP earnings per share of $0.28. Fourth quarter revenue came in at $311 million, flat over the same time last year, and bookings fell 15 percent to $261 million.

The fourth quarter was a major blow to Zynga, as it recorded a net loss for the quarter of $48.6 billion.

There were certainly some upsides for Zynga, as it capitalized on previous successes to bring out "FarmVille2" and keep the FarmVille brand going. The monthly audience for "Zynga Poker" saw some nice uptrend as well, with the audience growing 8 percent. Zynga's advertising efforts also saw a boost, which gave it a sound revenue count that let the company beat market expectations.

Work is steadily progressing on bringing its online gambling component to the U.K., and cash flow overall was actually up from the third quarter despite a share buyback effort. Both daily and monthly active users saw some gains as well.

But Zynga is also going to have serious challenges in the coming days. The firm’s third-party publishing efforts, featuring games like "Phosphor's Horn" and "Fat Pebble's Clay Jam," among others, will reportedly not have much impact on revenue for 2013. The first quarter will see fewer games launching overall, as Zynga redirects its focus to games that have the potential to become franchises and act on them accordingly.

There was a slight dip in mobile customers too, and if it sticks around, could represent some problem.

Looking forward, Zynga is projecting a net loss from $12 million to $32 million in the first quarter, but adjusted EBITDA is looking at a break-even point. Cuts in employees gave Zynga some room to breathe, but concerns were expressed about the losses in the leadership roster – though CEO Mark Pincus did highlight some key promotions and expressed faith in his management team.

There are some key questions that Zynga could stand to answer, especially its performance in the steadily growing mobile device sector – more mobiles, more opportunity, but Zynga needs to get some more skin in that game – as well as what it’s doing to get more users into the fray that aren't coming in from Facebook.

Moreover, we know Zynga is looking to bring out fewer games, but it’s badly in need of some growing revenue streams. The developers could use a few clearer plans about using what new games they do have coming out to get the growth restarted.

The next few months could be very important ones for Zynga, and may well represent the difference between complete shutdown and recovery into a vibrant future.




Edited by Braden Becker

Contributing TechZone360 Writer

SHARE THIS ARTICLE
Related Articles

Microsoft Research Project Allows for Inexpensive 3D Scanning from a Smartphone

By: Christopher Mohr    8/27/2015

It is now possible to perform 3D scanning from a smartphone, without additional hardware or an Internet connection, thanks to a new Microsoft Research…

Read More

Amazon's Scaled Back Consumer Device Efforts, Dash Button, and More

By: Paula Bernier    8/27/2015

Word is that Amazon is scaling way back on its consumer devices efforts, having let go of dozens of Lab126 engineers who worked on its Fire phone, acc…

Read More

The 4K War is Brewing, but Don't Expect a Crowned Winner

By: Special Guest    8/27/2015

The hype around 4K Ultra HD video is growing and we're seeing it gain traction in real ways. From the NFL Network and CBS using 4K cameras to capture …

Read More

Wallet Wars Part 2: Thanks to EMV, the Force is with Mobile Wallets

By: Special Guest    8/26/2015

In December 2015, when "Star Wars: The Force Awakens" hits movie theatres across the U.S., a very different type of force will 'awaken' the mobile wal…

Read More

Major Automakers Forge Alliance to Combat Cyberattackers

By: Joe Rizzo    8/25/2015

If you take a few minutes to think about what hackers go after, you'll realize that it is anything that has an Internet connection. Thanks to the Inte…

Read More