Gaming: Zynga Posts Strong Earnings, And A Major Acquisition
Zynga is the gaming company that made its name developing those social, addictive games that you likely played back when young people were largely on Facebook. After the mania for Facebook Games died down, the company re-invented itself in the market for mobile gaming.
- A public company, Zynga is mandated to release quarterly earnings reports and has done so this time for the first quarter of this year 2021. The company had record quarterly revenue, driven by strong engagement with older games like Words With Friends and Empires & Puzzles as well as newer games like Harry Potter: Puzzles & Spells.
- In Q1, Zynga also made a major acquisition.
By the numbers:
- Zynga reported $680mn in Q1′ 21 revenue, up 68% year-over-year. It’s a record quarterly revenue for the company in its history. Out of the $680mn, revenue from mobile made up the vast majority at $661mn.
- Zynga makes money primarily from ads on its games and in-app purchases, with the latter bringing in the majority of revenue. It reported average mobile daily active users of 38 million and mobile monthly active users of 164 million in Q1, up 85% and 139% year-over-year respectively.
- Zynga wasn’t profitable in Q1, reporting a small net loss of $23mn. Historically, from 2017-2019, the company has recorded small annual profits in the double-digit millions but reported a record net loss of $429mn last year as it spent big money to buy several gaming studios.
- Zynga achieved record international revenue outside the US in Q1′ 21.
- Zynga is acquiring a mobile game advertising and monetization platform named Chartboost. It’s agreed to pay $250mn in cash to buy the startup.
- Chartboost offers a way for mobile game developers to monetize their games with ads, something Zynga is definitely interested in. The gaming company pitches its Chartboost purchase as one unlocking additional growth and expansion opportunities for it in the mobile games ecosystem.
- Chartboost is backed by some $21mn in venture funding with backers including Sequoia Capital and SK Telecom Ventures. With that, a $250mn exit to Zynga is definitely a good one monetarily-wise.