Zynga Announces 4th Quarter Profits

Zynga surprised analysts when it announced its fourth quarter earnings and sales that topped Wall Street forecasts. According to a poll of analysts made by Thomson Reuters, they estimated a loss of 3 cents per share and $212 million in revenue. Zynga reported earnings of 1 cent per share and sales of $311 million in the fourth quarter. Zynga

Zynga’s shares gained 5 percent in after-hours trading but that doesn’t mean it would be smooth sailing for the social gaming company. The number of daily active users increased just by 3 percent over the year to 56 million in the fourth quarter of last year. That meant Zynga added 2 million new daily users for the past year.

The number of daily active users dropped 6 percent from the third quarter. But on the positive side, five of the top 10 Facebook games at the end of 2012 were Zynga games. These are Words With Friends, Zynga Poker, Bubble Safari, ChefVille, and FarmVille 2. These are according to data from AppDate.

Zynga said that its averages 72 million mobile users per month. It added that mobile gamers spent more time on Zynga titles in December than the total from the next five game companies combined.

During the post-earnings conference call, Zynga executives said that the company now has more teams devoted to mobile than to web games. In the fourth quarter, the company launched six new games that included two mobile versions of games that were previously web-only.

Zynga said it will be closing down three games, which are CityVille 2, The Friend Game, and Party Place. The company said that it will take a more disciplined approach in managing its game portfolio. Since October, the company has shuttered around 15 games, including Treasure Isle, PetVille, FishVille, and Mafia Wars 2. These are indications that the number of titles from the company was bloated and it is moving to a more streamline approach to improve its bottom line.



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