What Zynga's Mobile Metrics Mean

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Part 5
What Zynga's Mobile Metrics Mean PART 5 OF 6

Zynga’s Need for a Stronger International Presence

Revenue generated abroad

Zynga (ZNGA) has for long relied on US (SPY) markets for revenue. However, if the company is to take full advantage of the digital gaming market, it will need a stronger overseas presence. In 2Q17, Zynga generated 33% of its total revenue from overseas, down from 34% in 1Q17 and ~32% in 2Q16.

Zynga&#8217;s Need for a Stronger International Presence

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Zynga more dependent on US markets

A scrutiny of Zynga’s revenue by geography reveals that the company has come to depend more on the United States for revenue in recent years. For example, whereas Zynga generated only 33% of its 2Q17 revenue overseas, 40% of its 2Q14 revenue came from overseas, as shown in the chart above.

International markets present a huge revenue opportunity for digital game publishers, including Zynga. According to market intelligence company Newzoo, the worldwide digital games market will reach $118.6 billion by 2019, up from $91.8 billion in 2015.

Not only is much of the digital game revenue from outside North America, but international game markets are growing at a faster clip than North American markets.

Growth catalysts

Cheap smartphones and improving Internet access are opening up digital gaming markets in Latin America, as well as Asia-Pacific and EMEA (Europe, the Middle East, and Africa) regions. Companies such as Facebook (FB) and Alphabet’s (GOOGL) Google are investing a lot of money to bring more people online, especially in emerging markets (EEM).


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