Revenues rise, but stock compensation drags Zynga to $85m loss in Q1

TAGs: Playsino, social gaming, Zynga

zynga-revenues-riseSocial game developer Zynga saw revenues rise 32% in Q1 2012, but costs related to the company going public dragged overall numbers into red-ink territory. The company behind Zynga Poker, Farmville, Words With Friends and a host of other Facebook fixtures saw revenues rise to $321m, slightly more than analysts had expected. Despite the gains, Zynga’s balance sheet showed a loss of $85.4m compared to net income of $16.8m in the same period a year earlier. The company is putting the blame on nearly $134m in stock compensation expenses as early employees collectively yelled ‘cha-ching’ following the company’s initial public offering in December. Zynga stock rose 3.4% on the news, then fell as much as 4.5% in after-hours trading, hitting the $9 mark (below its $10 IPO price).

Zynga’s daily active users (DAU) rose 6% to 65m in Q1, while average daily bookings (virtual goods sales) per average DAU was up 8% to $0.055. Monthly active user numbers rose 24% to 292m, while monthly unique users were up 25% to 182m. Monthly unique payers were 3.5m, a 21% rise from Q4 2011. BTIG analyst Rich Greenfield called that last stat “pretty significant” given the miniscule percentage of Zynga’s user base that willingly parts with cash to improve their game play.

Zynga’s overall bookings were $329m, up 15% from Q1 2011 and up 7% from Q4. Most of the increase in bookings came from Zynga’s mobile offerings, which include recent hit game Draw Something. Zynga acquired Draw Something’s owner OMGPop for $180m in March. Although the timing of the purchase meant Draw Something had only 10 days in which to contribute to Zynga’s Q1 figures, CEO Mark Pincus said the acquisition “dramatically increases the size of our mobile network.” This prompted the company to raise 2012 bookings projections to $1.43b–$1.5b from February’s estimates of $1.35b–$1.45b.

Moving from social gaming whales to minnows… Social casino games developer Playsino (formerly Titan Gaming) has raised $1.5m in additional funding from investors, including Singapore’s IDM Venture Capital and Los Angeles-based Pacific Capital Group. Playsino CEO and former child actor (Mighty Ducks, First Kid) Brock Pierce said the extra bucks would go toward accelerating the company’s product offering and recruiting key personnel. In 2001, Pierce co-founded Internet Gaming Entertainment, which bought and sold virtual currencies used in multiplayer online role playing games like World of Warcraft.


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