Zynga’s cost-cutting measures over the last quarter have borne fruit, with the social publisher dramatically reducing losses in its latest financial report.
Zynga Q4 & FY2012
Quarterly revenue static year-on-year, but losses down.
Annual revenues up, and losses down.
Annual user increases but a quarterly decrease on Q3.
For the fourth quarter, Zynga reported net revenue of $311.1 million, almost static year-on-year, but a loss of $48.5 million, a significant improvement on Q4 FY2011’s $435 million.
For FY2012 in total, the social publisher made $1.2 billion, a jump from FY20122’s $1.1 billion. It reduced its losses over the whole year, managing to bleed $209.4 million, almost halving FY2011’s $404.3 million.
The company noted a 3% year-on-year increase in daily average users in the fourth quarter of 2012, although it saw a 6% drop from the third quarter of the same year.
A similar pattern was observed in monthly average users, with a 24% increase year-on-year in the fourth quarter from 240 million to 298 million, but a 4% drop from the third quarter.
Most importantly, average daily bookings per average daily active user – how much money Zynga makes form its users – decreased from 6¢ in in Q4 FY2011 to 5¢ in Q4 FY2012. Monthly unique payers dropped 1% year-on-year and 2% quarter-on-quarter.
Mobile seems to be a growing success for Zynga; the publisher said comScore reports mobile game players in the US spent more time in Zynga games than the next five game companies combined during December 2012.
“2013 will be the year of mobilisation for Zynga,” COO David Ko said.
In a post release call to investors, Zynga said it continues to focus on profitability, and has maintained positive cash flow, making note of “tough decisions” like closing studios, issuing lay-offs, and shuttering games.
Three more games were announced to have felt the headsman’s axe – Facebook titles Cityville 2 and The Friend Game and mobile effort Party Place. All three launched in the fourth quarter, and represent half of Zynga’s six releases over the three month period.
CEO Mark Pinucs said Zynga has “the best bench” of any company in the social sphere, and made several references to its development talent.
The company’s three foci moving forward is are profitability, expanding existing franchises and developing new ones, and building Zynga.com into a premiere gaming network.
Promotional partnerships with companies like LG and McDonald’s will be renewed or established, and Zynga is on track to launch its first real money gambling game in the UK in first half of 2013.
Regarding game quality, both Pincus and Ko noted that Zynga is working on getting feedback on games early in development, with Ko saying Zynga had learned its lesson from Mafia Wars 2, which flopped.
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