Zynga reports drop in revenue and number of users in first quarter

25 Apr 2013

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Online social games maker Zynga has revealed a profit of US$4.1m on US$263.6m in revenue during the first quarter of the year, while fewer consumers are playing its games.

Revenue slumped 18pc from the first quarter of 2012, while net income is compared to a net loss of US$85.4m for Q1 2012.

Net income for the first quarter of 2013 included US$29.9m of stock-based expense compared to US$133.9m of stock-based expense included in the first quarter of 2012.

Zynga’s online game revenue totalled US$229.6m, a decrease of 22pc compared to the year-ago quarter.  

On the increase, by 21pc compared to the first quarter of 2012, has been advertising revenue, which amounted to US$34.0m during Q1.

Bookings, which are the measure of the value of virtual goods sold within games, drew US$229.8m for the first quarter of 2013, a decrease of 30pc compared to the same time last year.

First-quarter diluted earnings per share were US$0.00, compared to US$0.12 for the year-ago period.

The company also reported a drop in its number of daily active users, to 52m during Q1. This marks a decline of 21pc from 65m in the year-ago period.

The number of monthly active users also fell, from 292m to 253m during the year, a drop of 13pc year-over-year.

Monthly unique users declined 18pc year-over-year, from 182m to 150m.

Mark Pincus, Zynga’s CEO, remains optimistic.

“We are encouraged by the strong execution from our teams and the breakout hit performance of FarmVille 2, which captures the imagination of nearly 4om players every month,” said Pincus.

“(The year) 2013 will continue to be a transition year as we face the challenging environment on the web and invest in developing the leading franchises and network across web and mobile platforms and offer our 253m monthly players a connected experience that can follow them from work to school to home and anywhere in between.”

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Tina held senior editorial positions at daily newspapers in Ottawa and Toronto

editorial@siliconrepublic.com