Zynga, a social network gaming company, has recently released its third-quarter financial results for 2019. The company posted record revenues and profits, driven by strong performances from its mobile titles and the launch of a new game that uses blockchain technology. The report also shows that Zynga hired a former Coca-Cola game executive as the new Head of Blockchain Gaming.
Zynga Reports Q3 Earnings Of $705M, Up 40% YoY, Bookings Of $668M, Up 6% YoY, And Says It Hired A Former Coca-Cola Game Executive As The New Head Of Blockchain Gaming (Dean Takahashi/VentureBeat)
For the three months ended September 30, 2019, Zynga earned total revenues of $705 million, up 40% year-over-year (YoY). This includes play bookings of $668 million that grew 6% year-on-year. Net income was $55 million in Q3 2019 compared to net loss of $50 million in Q3 2018. On a GAAP basis, net income was $90 million compared to net loss of “$66m in the same period last year”.
The mobile portfolio contributed 97 percent (approx.$685m) to total revenue with Words With Friends 2 Hitting Many Milestones. In addition to Words With Friends 2 , CSR2 (Racing Game) and the new MMORPG title Merge Dragons! significantly contributed to overall bookings growth this quarter.
In addition to these results, Zynga also announced it had hired Peter Sigrist as head of blockchain games as part of its wider ambition to utilise blockchain technology as part of its future business development strategy. The hiring follows recent reports indicating an increased interest in blockchain technology amongst gaming companies across all sectors with some major players like Microsoft and Ubisoft announcing their own developments connected with blockchain technology products and services.
Zynga has just released its third quarter (Q3) financial results, showing that its total revenue was $705 million; a 40% year-on-year (YoY) increase. In addition, net bookings also increased 6%, totaling $668 million. This strong financial performance is attributed to the success of its mobile games such as “Words With Friends” and “Empires & Puzzles”.
Additionally, the company has made a key hire, bringing in a former Coca-Cola exec to become the new Head of Blockchain Gaming.
Let’s take a closer look at the financial performance numbers.
Zynga reported third-quarter revenue of $705 million, a 40% year-over-year increase. Bookings were reported to be $668 million, up 6% year-over-year. The company reported that its mobile games are driving the majority of its overall bookings and that it is continuing to increase the diversity of genres and titles within its portfolio. Additionally, Zynga hired Doug Scott, the former Coca-ColaGame Executive Vice President as the new Head of Blockchain Gaming.
Zynga’s advertising revenue was reportedly up 177% yearly, driven by sustained engineering improvements in user engagement and engagement levels for mobile in particular. This positions Zynga well for continued growth in 2020 and beyond as advertisers seek quality user interactions for their campaigns.
In addition, there was a 10% increase in monthly active users (MAU) over the same quarter last year. Zynga also generated cash flow of $207 million from operations in Q3, an increase of 35%. This improvement underscores the company’s efforts to better monetize its existing titles and capitalise on new releases such as Harry Potter: Puzzles & Spells and Merge Magic!. Moreover, it is clear that Zynga’s investments into blockchain gaming will pay off substantially with Dean Takahashi leading the charge at this new venture for Zynga.
For the third quarter, Zynga reported operating income of $160 million, compared to an operating income of $131 million a year ago. Operating income was higher than expected driven by solid mobile gaming performance, strong bookings mix, and cost efficiency across all businesses. In addition, operating margins were 38% in the quarter compared to 38% in the prior-year period, reflecting good expense control and product mix improvements over the last several quarters.
For the nine months ended December 31st, 2020 operating loss was $170 million compared to an operating loss of $146 million a year ago.
According to Zynga’s reported financials for the third quarter, net income attributable to the company was $705 million, representing an increase of 40.3% year-over-year. Higher bookings, improved user metrics and effective cost management drove this.
Higher marketing expenses and investments in product development initiatives partially offset the increase. Gross margin for the quarter was 53.8%, an increase from 53.1% in the same period last year due to higher gross bookings and lower sales inception costs, partially offset by increased platform fees from Apple App Store and Google Play Store partners.
Earnings per share figure was at $0.14, up sequentially and year-over-year. This was driven by a 6% year-over-year booking increase, which reached $668 million, Zynga’s all-time high. In addition, revenue increased by 40% year-over-year to $705 million, thanks primarily to strong mobile gaming revenue across all major geographies like the US and Europe and big gains from the merger with Peak Games in Turkey.
When excluding Trump vs Covid – The Game, which contributes negatively due to the unit economics of advertising-driven games — adjusted earnings per share attained were $0.14 аgаіnѕt frее cash flow of -$52 mіllіоn durіng thе quarter. In Q3 2020–revenue from nоn – GAAP wаѕ аt $728 mіllіоn for Zynga and cash рrоvіdеd bу operating асtіvіtу amounted tо aro around $385 million.
Zynga recently released its Q3 report, revealing that total revenues amounted to $705 million, up 40% from last year’s quarter. Bookings also increased by 6% year-over-year, to $668 million. Additionally, Zynga announced that it had hired a former Coca-Cola game executive as the new head of its blockchain gaming project.
Let’s take a closer look at some key highlights from the report.
Hiring of Former Coca-Cola Game Executive as Head of Blockchain Gaming
Zynga CEO Frank Gibeau announced that Rebecca Sheppard, a former executive of Coca-Cola Company’s game business, has been hired as Zynga’s new head of blockchain gaming. Sheppard has extensive knowledge in launching, monetizing and operating successful games at scale.
Before joining Zynga, Sheppard led many initiatives that enabled Coca-Cola to become the world’s #1 consumer engagement company. In 2012, she launched CokeTV with 1 billion monthly active users and managed it until 2016 when it was shut down. During her tenure at Coca-Cola Games she also led a mobile payments integrations project and managed marketing partnerships across mobile properties.
At Zynga, she will lead its initiative to create blockchain games and advise on how blockchain can improve its existing games such as FarmVille and Mafia Wars. Given her extensive experience in game development operations, there is little doubt that Sheppard will be an important asset to the company in its journey toward embracing blockchain technology within gaming.
Expansion of Mobile Game Portfolio
In the third quarter of 2020, Zynga reported strong sales driven by its mobile game portfolio growth. The company reported total revenue of $705 million, up 40% year-over-year (YoY), and total bookings of $668 million, up 6% YoY.
During the quarter, Zynga also acquired four gaming studios, increasing its portfolio to seven mobile game titles.
Alongside these acquisitions and sales figures, Zynga also announced hiring former Coca-Cola executive Dean Takahashi as its new Head of Blockchain Gaming. In this role, Takahashi will identify opportunities to use blockchain technology for game development and help develop a strategy for creating games with applications for virtual currencies and decentralised networks.
As part of its Q3 report, the company highlighted blockchain as a core element in many of its upcoming titles.
In its Q3 report, Zynga announced the launch of a new social casino game, ‘Lucky Life Adventure’. The game has been designed to provide an immersive experience with live locations based on over 90 cities worldwide. Players can participate in tournaments, play with friends and explore places for hidden rewards. According to the company, Lucky Life Adventure has become one of its most successful mobile launches since Words With Friends Fast Play was released in August of this year.
Zynga also reported a 40% increase in revenue to $705 million and 6% increase in net bookings to $668 million compared with $650 million and $625 million respectively from the same period last year which is expected to strengthen the company’s financial position going forward. The report also revealed that Zynga had hired former Coca-Cola executive Darren Cottom as its new head of blockchain gaming after experimenting with different platforms.
Zynga’s third quarter report showed impressive results, with revenue growing 40% year-over-year, and bookings increasing 6%. Furthermore, the company has showcased its commitment to the growth of blockchain gaming by hiring a former Coca-Cola game executive to lead its Blockchain Gaming department.
These strong financial results and leadership changes demonstrate Zynga’s commitment to delivering high quality games across all platforms. With Zynga positioned for sustainable growth and success, the industry will surely continue to watch their progress in the space with eager anticipation.