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Zynga profits nosedive by 95 percent

Monday, 26th September 2011 02:35 GMT By Brenna Hillier

The grandaddy of social network gaming has checked its suspiciously bubble-like pace for the first time.

Zynga’s latest quarterly financial filings, as reported by Gamasutra, reveal the Farmville and Mafia Wars publisher’s profits dropped year-on-year by 95 percent, from $27.2 million to $1.3 million.

In revenue terms, Zynga saw a 15 percent increase, a less stellar performance than its March posting of 24 percent growth.

More concerning than a decline in growth is a pair of twinned decreases – Zynga’s monthly average users dropped by four percent in the last quarter, and so did its virtual goods sales, down from $286.6 million to $274.7 million.

Zynga noted increased competition, the transition to Facebook credits with accompanying 30 percent revenue share, and lack of new releases as factors contributing to a less than brilliant quarter.

Zynga is set to make its initial public offering shortly, and is seeking $1 billion in the process.

Thanks, Destructoid.

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18 Comments

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  1. DarkElfa

    Die you bastard company, DIE!

    #1 3 years ago
  2. deathgaze

    Eh, I got no hate for Zynga. Whatever gets more folks gaming is fine with me. This is probably gonna hurt their IPO, though. It’s definitely not a good thing to watch your YOY Profit drop by 95% right before an IPO.

    #2 3 years ago
  3. jacobvandy

    How the hell does their profit drop by 95% while their revenue INCREASED by 15%? Yes, having to pay Facebook 30% of their microtransactions is probably part of the reason, but something doesn’t add up there…

    #3 3 years ago
  4. Phoenixblight

    @3

    YOY is a snapshot from say Q3 2010 to Q3 2011. Its practically at this point last year they were making 27.2 and now they made 1.3 million.

    #4 3 years ago
  5. Freek

    Hopefully a sign that social and freemium games are moving forward to become more ingaging experiences rather then friendlist spammers, leaving Zynga behind.

    #5 3 years ago
  6. GrimRita

    I think its because of investment in their recent releases – which are essentially all the same. But certainly the release of Sims Social will have an impact

    #6 3 years ago
  7. Lahanas

    There are no words to describe how much I want this facebook/social/smartphone crap to DIE. Just DIE. Real gaming is done on consoles and PC.

    #7 3 years ago
  8. Telepathic.Geometry

    @7: I’d rather they upped their game a bit, and made games with some real substance.

    #8 3 years ago
  9. Deacon

    @8 Exactly.

    #9 3 years ago
  10. Chockster

    Oh, this is beautiful. Just beautiful.

    #10 3 years ago
  11. viralshag

    If a “social gamer” said “eugh, Naughty Dog, I hate those silly console games, I wish they would just shut down and die!” I bet there would be a complete uproar and a call for some witch-hunting.

    Try showing a little less ignorance and accept that some people prefer the games that you don’t. Like #2 said, anything that gets more people gaming is surely a good thing?

    #11 3 years ago
  12. YoungZer0

    This is rather sad news. Dunno why so many people applaud it.

    #12 3 years ago
  13. StolenGlory

    @12

    Indeed. You might not like the company for whatever reason, but the jobs of many folks will likely be at risk due to this in the near-term.

    #13 3 years ago
  14. sg1974

    “Zynga was set to make its initial public offering shortly, and was seeking $1 billion in the process.”

    There, fixed that for you.

    Not long now before the analysts decide that Rovio Mobile is not worth at least $5billion (based almost exclusively on the success of a single game).

    #14 3 years ago
  15. IL DUCE

    I don’t feel the need for Zynga to “die” per say…but they have been milking a cow just like all these social/mobile games and eventually there is nothing left to milk…and it seems to be approaching that point now…just like with everything, when its new and unique, its fun and everyone is playing it but as time goes by, you either need to innovate further or give up because success isn’t going to keep throwing itself your way for farming games that cost practically nothing to make that made the company so much money…it’s just like everything else in history, when something is not sustainable it will not last…and I wouldn’t be surprised if Rovio went down a similar path, although at least I can actually say they put some form of effort into making their game while Zynga on the other hand is a joke…

    I know gaming is gaming, and yes it’s exposing more people to games but it’s still a joke…and Zynga made way more money than they should’ve for what they produced…

    #15 3 years ago
  16. DarkElfa

    @12, sad?! I don’t like you right now, don’t talk me…..just *sniff* don’t.

    #16 3 years ago
  17. DSB

    @12 I don’t know if you’ve read up on the company and its practices in general, but I personally wish them all the worst in the world.

    They’re not a developer, they’re a hedgefund posing as a game company. They’re simply jackals grabbing whatever good idea they can find on the internet, slapping their name on it and expanding their company like a mindless robot building upon itself.

    #17 3 years ago
  18. sg1974

    IL DUCE and DSB hit the nail squarely on the head. Nothing more to add.

    #18 3 years ago