Social gaming operator Zynga turned in better than expected numbers in its first financial report under new CEO Frank Gibeau.
In the three months ending March 31, Zynga revenue rose 1% to $186.7m but aggressive cost-cutting measures cut the company’s quarterly loss by 43% to $26.5m.
Game revenue totaled $137m, down 7% year-on-year but up 6% from Q4 2015. Advertising and other revenue totaled $50m, up 41% year-on-year but down 12% sequentially.
Bookings, the in-game sales of virtual goods to players, were up 8% year-on-year to $181.6m, although flat sequentially. Mobile bookings were up 31% year-on-year to $139m, accounting for 76% of total bookings.
Average daily bookings per daily average user were 10.3¢, up from 7.5¢ in the same period last year, but down from 11¢ in Q4. The rate of conversion from players to payers was 1.7%, up from 1.5% a year ago but flat sequentially.
Sadly, Zynga continues to shed customers, as its average daily active users were 19m, down 6m year-on-year, but up 1m from Q4. Mobile daily actives were slightly better, falling from 19m last year to 16m, while web actives fell by half to 3m.
The web decline was most clearly illustrated by Zynga’s claim that Q1 marked the first time in which Apple platforms like the iPhone and iPad claimed the largest share of its users, overtaking Facebook, where Zynga made its name with titles like Farmville.
HOW LONG BEFORE ZYNGA DEBUTS SLOTSVILLE?
Zynga’s social casino titles continue to backstop its gaming numbers. Zynga Poker’s share of game revenue was unchanged at 19% but mobile bookings were up 13% year-on-year.
Zynga’s overall slots portfolio accounted for 32% of game revenue as slots bookings improved 13% year-on-year while mobile bookings improved 77%. Hit It Rich! Slots accounted for 15% of game revenue despite an 8% sequential decline in mobile bookings and the relatively new Wizard of Oz Slots claimed its own 15% revenue share.
The first quarter saw the launch of Zynga’s new Willy Wonka and Vegas Diamond slots franchises, while this week saw Zynga roll out Hit It Rich! successor Spin It Rich! Slots, which features games based on characters like Pee Wee Herman as well as the Broadway smash Menopause the Musical. Clearly on to a good thing, Zynga plans to launch the new True Vegas Slots sometime in Q2.
TURNAROUND JUST AROUND THE CORNER
Gibeau (pictured) said his first two months on the job had been productive and he’d formed the belief that Zynga had “all the ingredients it needs for a successful turnaround.” Gibeau said that with an emphasis on “improved planning, more focused execution and cost control,” he saw no reason why Zynga’s margins “can’t be more in line with its peers.”
Looking forward, Zynga says it expects to lose between $20m and $26m in Q2. Zynga says it finished the quarter with $857m in cash and equivalents. For the record, that’s around $250m less than it had this time last year. Tick tick tick…