Zynga, the maker of online game FarmVille, informed investors on Tuesday that its Chief Financial Officer David Lee will exit the company and Chief Accounting Officer Michelle Quejado will serve as interim CFO. Lee, who previously worked with Best Buy, joined Zynga in April 2014, and plans to quit the gaming company in December.
Zynga acknowledges struggle
Zynga also said that two of its upcoming games have been delayed. The game maker earlier planned to launch the games Dawn of Titans and CSR2 in the fourth quarter, but now the games will be launched in 2016. Gamers are rapidly shifting to mobile devices from PCs, and the company has had to go through a lot of struggle to adapt to that shift.
Founder Mark Pincus, who returned to Zynga as its chief executive, is focusing on cutting costs and reducing Zynga’s slate of games. With the delay in two games, the number of games that the company launches this year is reduced to five. The game maker is expected to release Princess Bride Slots in the current quarter. For 2015, the company plans to release six to eight mobile games.
In a letter to shareholders, Zynga mentioned that developing new sustainable growth continues to be a challenging task and is unpredictable as well. Also it is getting tough competition from rivals such as King Digital and Glu Mobile.
Weak guidance for fourth quarter
For the third quarter, Zynga reported bookings of $176 million, beating the average analyst estimate of $170.8 million. However, the company expects bookings for the current quarter at $165 million to $180 million, well below the analysts’ expectations of $193.9 million. Bookings equal the revenue recognized in a period plus the change in deferred value. Zynga considers the sale of virtual goods and downloads as deferred revenue, and they are added to the company’s books as and when they are consumed.
Zynga games such as Wizard of Oz Slots and Words with Friends were quite successful and helped in raising the company’s revenue to $195.7 million in the third quarter, which ended on Sept. 30. The game maker posted a profit of $3.1 million or break-even on a per share basis, while in the last year it incurred a loss. Zynga plans to buy back shares worth $200 million.
On Tuesday, Zynga shares closed up 2.51% at $2.45. Year to date, the stock is down by almost 8%.