Zynga Inc (ZNGA) Beats Estimates, To Release Ten Games In 2016

Zynga Inc (ZNGA) Beats Estimates, To Release Ten Games In 2016

Zynga successfully beat Wall Street estimates for bookings, and it also announced plans to launch ten new games in 2016. Overall, the number of users has declined, and Zynga Inc (NASDAQ:ZNGA) is aware that it is time to ship some new big games to offset that decline.

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Zynga shifting to new games

The mobile game market is worth $34 billion, but the gaming company is losing audience fast. Therefore, elbowing competitors out of the way is a fundamental challenge, and its latest earnings highlight this. Several factors indicate that the company has stabilized its most valuable games and is making money from its core users.

For 2016, Zynga’s new games include four social slots games and two titles which it gained after acquiring NaturalMotion in 2014 for $527 million. Also Dawn of Titans and CSR 2, which are in test markets now, will come out this year. Though the game maker has not given any specific date for the launches, it did say that they will be released this year.

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CEO Mark Pincus, who sees a lot of potential in Dawn of Titans, expects both games to debut in the second half of the year. Also new FarmVille and CityVille games will come to mobile this year. The game maker will also launch two games it got from the recent acquisition of California-based game studio Zindagi Games.

Same numbers as last year

Zynga reported breakeven results or EPS of 0 cents on bookings of $182 million, which were the same results as in the fourth quarter of last year. Analysts expected the game maker to break  even on bookings of $177 million. Zynga is using live operations to monetize existing games and is doing a good job at it, and the numbers prove it. The social slots and core mobile games are delivering good results for the company.

“I think the teams have been making great progress on our execution on our live mobile franchises,” Pincus said in an interview with GamesBeat. “We saw strong performance from our core live mobile categories like slots, Words With Friends, poker, and ads.”

Zynga’s stock price declined to $1.90 after it took a plunge of over 10% in after-hours trading. Zynga’s market value is $1.93 billion now.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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