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Zynga CEO Frank Gibeau wants to make sure that the company’s strong performance for the third quarter that ended September 30 isn’t a fluke. The social mobile game publisher reported net income for the second quarter in a row — the first time it has done so since going public in 2011.
In an interview with GamesBeat, Gibeau said the company has multiple avenues for growing revenues — including the acquisition of new games, as it has done with its $100 million purchase of Peak Games’ mobile casual card game studio, the maker of spades and gin rummy apps.
First, Gibeau said Zynga is beefing up live operations, such as challenges in Zynga Poker, where it is generating new revenue from existing players. It is also still investing in the strategy game Dawn of Titans, which has had a disappointing launch but could be reinvigorated with the right updates for player-versus-player content, Gibeau said.
Live operations are generating a lot of revenue across the games industry, and they reflect the fact that hardcore players stay engaged with a game over a long time and don’t mind spending money in them. But companies have to be careful not to squeeze too much revenue out of those operations, or they may face player revolts.
Gibeau said Zynga is also adding new games on top of existing franchises, such as the imminent launch of Words With Friends 2, the sequel to the popular eight-year-old Scrabble-like game Words With Friends. The publisher learned from its Zynga Poker revamp that it is best to keep the older game around and layer in a successor for fans who want new features. Those fans will be able to play with each other across both versions.
And Gibeau said the company is open to acquisitions, like the Peak Games deal, where it adds to the company’s audience reach and profits. These deals can add new intellectual properties, but Gibeau said the company is trying to add those on its own and hopes to talk more about those — in the action strategy, casual, and invest and express (think FarmVille) — in 2018. Zynga is also seeking access for brands on which to base games.
Zynga is also looking at adding games that use new technologies, such as augmented reality and messenger games, Gibeau said.
It has 1,524 employees, and it has the constant challenge of dealing with a decline of Facebook desktop users for older games, while it has to stay competitive in the mobile game markets where there are tons of rivals. But mobile is now 87 percent of Zynga’s bookings. Compared to a year ago, mobile revenues were up 33 percent. Mobile daily active users were 19 million, up 19 percent from a year ago. A larger percentage of those players are also paying for game content.
The strongest games in the quarter were Zynga Poker, Words With Friends, and CSR 2.
“This was our strongest performance for revenues and bookings in four years,” Gibeau said. “It’s the fifth quarter of sequential revenue and bookings growth and the second with consecutive net income.”
One of Zynga’s most successful games has been CSR 2, which saw increased engagement from events such as a Fast & Furious promotion and a Ferrari car introduction during the quarter.
Words With Friends saw a 9 percent increase in revenues from the previous quarter thanks to the introduction of a new social dictionary with words like “ew.” The 50,000 new words have been used more than 33 million times since launch.
Filling out the product line also helps. With the Peak Games deal, Zynga now boasts the largest portfolio of casual card games, from poker to gin rummy, as well as the Okey Plus card game that is popular in the Middle East.
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