Mobile audience expanded 19% YoY
Although Zynga (ZNGA) is making positive progress on the mobile front, its 3Q17 metrics show that its mobile audience growth slowed compared to 3Q16. Its mobile revenue growth gained momentum during the quarter despite the slowdown in audience growth. This trend suggests that Zynga garnered more financial value from its existing mobile user base.
Zynga closed 3Q17 with 19 million daily active users (or DAUs) on mobile, indicating that its mobile audience grew 19% YoY (year-over-year). In 2Q17, Zynga’s mobile audience grew 28.0% YoY, making it the strongest mobile audience growth the company has registered since 4Q14.
Mobile revenue growth accelerated
As Zynga’s (ZNGA) mobile audience growth slowed in 3Q17, mobile revenue growth accelerated. The company reported mobile revenues of $194.4 million in 3Q17, up 33.0% YoY and increasing from its 28% YoY growth in 2Q17.
Mobile contributed 87.0% of Zynga’s total revenues in 3Q17, compared with 86.0% of total revenues in 2Q17 and 80.0% of total revenues in 3Q16.
Zynga recently spent $100.0 million to acquire the mobile card game business of Turkey-based digital games publisher Peak Games. It remains to be seen how this investment would impact Zynga’s mobile business going forward, as the mobile games market is extremely competitive.
$58.7 billion in the mobile games market
Zynga and its rivals Electronic Arts (EA), Activision Blizzard (ATVI), Glu Mobile (GLUU), and Take-Two Interactive Software (TTWO) are vying for a $58.7 billion revenue opportunity in the global mobile games market by 2023. These estimates by BIS Research also indicate that the global mobile games market was worth $32.3 billion in 2016.