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Zynga’s mobile strategy is beginning to work.
The social game maker revealed its financial results for Q1 2016 today, with bookings at $182 million. That is above the consensus estimate of $162 million from analysts. It was also higher than Zynga’s own expectations of $150 million to $165 million. This was about even with last quarter, but it did represent an 8 percent increase from the same period last year. Revenues for Q1 were at $187 million. This comes as Zynga works to strengthen its presence in the $34.8 billion mobile business with plenty of help from its slots games and hits like Words With Friends.
Importantly, Zynga noted that Apple is now the company’s largest platform partner. It overtook Facebook, the social site where Zynga’s games first took off. Daily active users on mobile were up 7 percent over the last quarter.
These results also come 60 days after Frank Gibeau, previously from EA’s mobile division, took over as chief executive officer.
“Since joining, the biggest surprise for me has been how much operating leverage we have across the company, which we can unlock with improved planning, more focused execution, and cost control,” Gibeau noted in a press release sent to GamesBeat. “That means putting in place more disciplined, consistent development practices and more cross team collaboration. Over the long term, there’s no reason why Zynga’s margins can’t be more in line with its peers.”
Zynga made its name with Facebook hits like FarmVille, but the company had a difficult time fully transitioning to mobile as developers like King and Supercell became new giants in social. That’s now changing, with mobile making up 76 percent of Zynga’s Q1 bookings with $139 million, which is up 31 percent from the previous year. The company has had success in the mobile casino sector, especially with slots games based on The Wizard of Oz and Willy Wonka and the Chocolate Factory. Slots bookings were up 13 percent over the previous quarter. Even the 6-year-old Words With Friends saw growth thanks to the addition of new features (like daily challenges). Its bookings were up 60 percent over the same period in 2015.
For the next quarter, Zynga is projecting bookings between $160 million and $170 million. It expects revenues to fall between $170 million and $180 million. The company won’t have many new app launches in the second quarter. The racer CSR2 is set for Q3, and the strategy game Dawn of Titans is coming during Q4. FarmVille: Tropic Escape is also expected during the second half of the year.
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