Zynga Inc. (NASDAQ:ZNGA) Makes A Comeback With Better Than Expected Numbers
As anticipated, under the leadership of Don Mattrick, Zynga Inc. (NASDAQ:ZNGA)’s new Chief Executive Officer, the company shed its 3Q13 losses despite decline in number of company’s gamers and quarterly revenues.
To remind Don Mattrick, having worked at Electronic Arts Inc. (NASDAQ:EA) and even with Xbox division at Microsoft Corporation (NASDAQ:MSFT) is a respected name in a digital gaming industry who replaced Zynga founder Mark Pincus as CEO earlier this summer.
The company which once created the buzz with its popular gaming titles ‘FarmVille’ and ‘Mafia Wars’ that were largely played on desktop and laptop computers, failed to keep the pace to benefit from transitioning to smartphones and tablets. That adversely affected the company’s financials as the more and more gamers were switching from traditional PCs to smartphones. Following the losses, the stock of Zynga Inc. plunged over 60% from its initial public offering of $10 about couple of years ago.
During 3Q13 the company reported the loss of just around $68,000 which marks significant improvement from the loss of nearly $52.7 million during the same quarter, a year earlier. Moreover this figures are also important because the revenue during 3Q13 declined by 36% to $202.6 million from $316.64 million during 3Q12. However, revenues beat the street estimate by around $13 million. The average number of people who played Zynga’s games reduced by half to 30 million in 3Q13 compared to 60 million during 3Q12.The Company is trying to offset these losses by streamlining jobs where it ended September with 2,206 employees compared to peak of 3,300 employees during last year.
The Zynga CEO, Don Mattrick mentioned that the company is working hard to make a comeback on the Web with transitioning to mobile and develop new hits.
Before the earnings release the company also announced an appointment of Clive Downie as its new Chief Operating Officer. Clive was a colleague to Mattrick and has sound track record in gaming industry with over 15 years spent at Electronic Arts Inc. (NASDAQ:EA). At Electronic Arts, Clive also managed marketing for many of the most popular and successful game franchises including Need for Speed and FIFA Soccer. Recently he was managing Western Operations for DeNA Co Ltd, a Japanese mobile gaming giant. Mattrick is turning to his former colleague to tap Clive’s expertise in mobile games to help the Zynga connect with more people on smartphones and tablets.