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Zynga Banks on New Products to Sustain Its Recovery

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Apr. 8 2019, Published 2:18 p.m. ET

Zynga wants to continue expanding its flagship games

According to Zynga (ZNGA), it’s planning to introduce new products to drive growth this year. Its management has declared its turnaround complete and says that it’s aiming to position itself for significant growth in 2019 and beyond. Zynga’s new games for 2019 will start arriving on the market in the second half of the year. The company says the new products will enhance its growth potential in 2020.

Even as Zynga builds new products, the company will continue to develop its flagship games, which it fondly calls its “forever franchise.” The forever franchise includes games such as Words with Friends and Zynga Poker.

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Zynga’s revenue rose 7.0% YoY

Zynga generated revenue of $907 million in 2018, an increase of 5.0% YoY (year-over-year). In the fourth quarter, Zynga reported revenue growth of 7.0% YoY to $249 million supported by the strong performance in its Mobile Games segment.

Zynga’s fourth-quarter top line performance exceeded expectations, as the company had originally guided for fourth-quarter revenue of $235 million.

Game developers put on a good show

The fourth quarter of 2018 was generally great for many major game developers and publishers. Electronic Arts (EA), Activision Blizzard (ATVI), and Glu Mobile (GLUU) reported revenue rises of 11%, 17%, and 19% YoY, respectively, in the quarter. Revenue soared close to 160% YoY at Take-Two Interactive Software (TTWO) in the quarter.

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