Zynga Posts $129M Loss as Mobile Revenue Rises

Mobile game company Zynga is off to a hot start in 2019.

Led in large part by its Words With Friends title and “outstanding performances” by new games Merge Dragons and Empires & Puzzles, Zynga’s total revenue for the first quarter of 2019 was up 27 percent year-over-year to $265 million. The figure represents Zynga’s best mobile performance in its 12-year history. As a result, the company is raising its guidance for 2019 to $1.2 billion in total revenue, an increase of $50 million from its prior estimates. The new projection is up 32 percent from 2018.

However, Zynga also posted a net loss of $129 million, a significant increase from its prior guidance of $59 million.

During a call with investors on Wednesday, Zynga CEO Frank Gibeau touted the emergence of 5G networks, saying it will “enable higher performance games and new innovative forms of distribution,” while the increase of cross-platform play across devices will also expand Zynga’s audience.

Advertising bookings for the company also grew by 3 percent from the same period last year to $65 million, but overall monthly and daily active users both declined by 12 percent and 2 percent, respectively.

During the quarter, Zynga soft-launched two new games, Game of Thrones Slots Casino and Puzzle Combat from newly acquired studio Small Giant Games, and the company has plans to launch more new titles later this year.

“Game of Thrones is at high pitch right now and the ability to launch a product into that halo is a tremendous opportunity for us,” Gibeau said of the HBO series tie-in game. In addition to the company’s Game of Thrones title, it also has games based on popular IP such as Star Wars and Harry Potter. “Our goal is to maximize the fandom for those … and build new forever franchises,” said Gibeau.