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Zynga Announces Awesome 1Q15 and Layoffs

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Part 3
Zynga Announces Awesome 1Q15 and Layoffs PART 3 OF 5

Zynga Targets Mobile Gaming in 1Q15 and Beyond

Zynga aggressively eyes the mobile gaming space

Alongside its 1Q15 earnings release, Zynga (ZNGA) CEO Mark Pincus underlined the company’s focus on five specific gaming categories:

  1. Social Casino
  2. Action Strategy
  3. Invest & Express
  4. Casual
  5. Racing

Zynga Targets Mobile Gaming in 1Q15 and Beyond

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In fiscal 1Q15, the number of customers accessing its mobile games daily grew by 18% year-over-year and 9% on a sequential basis. The mobile monthly audience also showed year-over-year growth of 29% and 9% growth on a sequential basis. Zynga says mobile accounted for 63% of the company’s $167.4 million in bookings, or money spent on games, in 1Q15.

With the launch of Dawn of Titans, Empires & Allies, and FarmVille: Harvest Swap in 1Q15, Zynga entered the mobile action strategy and mobile match 3 spaces. Zynga’s focus on the mobile space is in line with changing preferences. In the first week of May 2015, Zynga launched Empires & Allies, its first strategy game for mobile, on the Apple (AAPL) iOS and Google Android platforms.

Zynga management says it plans to release between six and eight new games in 2015, and it will continue to expand its casino gambling offerings.

If you’re bullish about the video gaming space, you might consider investing in the PowerShares QQQ Trust, Series 1 (QQQ) that invests about 0.35% of its holdings in Electronic Arts (EA).

Zynga slow to adapt to the mobile space

In 1Q15, Zynga stated that its move away from Facebook (FB) games toward mobile was a move in the right direction, with mobile accounting for 63% of overall bookings. On a year-over-year basis, bookings grew by 84%. In 1Q14, mobile bookings made up 36% of the company’s total bookings. Clearly, Zynga has successfully managed the transition to mobile.

In 2009, Zynga was one of Amazon’s (AMZN) largest customers with respect to its data center and cloud computing services. Many things have changed in this space since then. After a period of rapid growth as a maker of Web-based apps, Zynga entered a difficult phase when customer preference shifted to mobile games. Ever since then, the company has had difficulty matching the success of its Facebook games such as FarmVille and Words With Friends.

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