Zynga’s Q2 2013 earnings report shows losses in revenue, players, and an abandonment of real-money gaming

Zynga

Zynga today reported its Q2 2013 earnings, with the social and mobile game developer announcing losses of revenue, a decreasing player base, and plans to abandon its push for real-money gaming in the United States.

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Gameloft’s Q1 2013 revenues up 21 percent to $70.1M

Gameloft logoGameloft yesterday released its earnings for Q1 2013. The French mobile game developer achieved sales of €54.2 million ($70.1 million), up 21 percent over the same quarter a year ago.

Smartphone and tablet revenues increased by 71 percent year-over-year, representing 60 percent of total group sales compared with 43 percent in Q1 2012.

Gameloft attributes its fast growth to the success of the free-to-play model. The company adds that more than 67 percent of its smartphone sales came from in-app purchases and ad revenues in Q1. In terms of which games performed well in the quarter, Gameloft says older titles from as far back as 2011 and 2012 like Dungeon Hunter 4: Zero Hour, World at Arms, My Little Pony, Ice Age Village, Order & Chaos Online, Gangstar Rio: City of Saints and Asphalt 7: Heat, have largely contributed to the company’s strong performance in the first quarter.

Gameloft hopes three recently released titles in the past few weeks including Dungeon Hunter 4, Iron Man 3 and Order & Chaos Duels, help grow sales in future quarters. Gameloft claims Iron Man 3 was the most downloaded game worldwide on the iOS after it was launched. Future releases include Gangstar Vegas, Despicable Me and Uno & Friends.

Gameloft didn’t provide an earnings forecast for Q2 2013. Gameloft’s share price closed today at €5.29 ($6.84), up 0.95 percent.

GREE’s Q3 2013 sales declined quarter-over-quarter to $370.9M, profits down 24 percent to $105.7M

GREE logoMobile-social gaming giant GREE today reported 37.9 billion yen ($370.9 million) in revenue and 10.8 billion yen ($105.7 million) in operating profit for the third quarter of 2013, a quarter-over-quarter decline of both sales and profits. Sales fell 4 percent and profits 24 percent. Year-over-year, revenues are down 18 percent from 46.2 billion yen ($452.1 million) in Q3 2012 and operating profit dipped by 56 percent from 24.5 billion yen ($239.7 million).GREE Q3 2013 earnings

The Japanese company, which was established in 2004, also posted an “extraordinary” loss of 4.03 billion yen (39.4 million) on one-time write-off of assets related to some titles. The loss was part of GREE’s plans to shift growth strategy to “selection” and “concentration”, where it will streamline its portfolio of core titles. Card battle titles from Pokelabo, the Japanese game studio GREE acquired in October 2012, are performing well for GREE. Three of the top 25 grossing iOS apps in Japan include Guardian Battle of Glory at No. 7, Sword of Phantasia at No. 10 and Clan Battle of Fate at No. 25. GREE also plans to share its successful Android lessons with Pokelabo, while Pokelabo plans to do the same for GREE with iOS lessons. (more…)

DeNA reports new earnings record with $2.04B in revenue and $775M in operating profit for fiscal year 2012

DeNA logoJapanese mobile-social gaming juggernaut DeNA today reported 52.3 billion yen (approximately $528 million) in revenue for its fourth quarter of 2013, a 22 percent increase year-over-year, while operating profit rose 3 percent from the same quarter of the previous year to 18.2 billion yen ($184 million). For the 2012 fiscal year, the company set a new earnings records with revenues of 202.5 billion yen ($2.04 billion) and 76.8 billion yen ($775 million) in operating profit, up 38 and 28 percent respectively.

“DeNA’s full-year revenues and operating profits increased for the ninth consecutive year, representing growth every year since the company went public,” said Isao Moriyasu, President and CEO of DeNA, in a statement. “We will continue to pursue aggressive growth worldwide for our mobile internet business, especially in the mobile-social games sector.”DeNA earnings report Q4 2012 (more…)

Capcom reports $644.3M in digital revenue, up 6.4% quarter-over-quarter

Capcom logoCapcom today reported net sales of 94.1 billion yen ($952.8 million) and 3 billion yen ($30.4 million) in net income for the 2013 fiscal year, which ended March 31, 2013. Compared to the Japanese gaming company’s yearly results in 2012, net income was down in 2013 by 55.8 percent and net sales were up 14.6 percent.

Notable mobile games included Minna to Monhan Card Master, which is distributed on DeNA’s mobile-social gaming network Mobage, continued to show growth, citing the increase in smartphone market penetration as the growth driver. Resident Evil: Outbreak Survive on Japanese mobile-social gaming giant GREE’s platform continuously acquired new users. Both titles “enjoyed membership” eclipsing two million each. Mobile game developer and publisher Beeline’s Smurf’s Village “has securely built stable sales over a long range.”

Capcom’s digital content business, which includes console, mobile and social games businesses, posted revenues of 63.6 billion yen ($644.3 million), a 6.4 percent uptick year-over-year, while operating income fell significantly year-over-year by 45.2 percent to 7.1 billion yen ($71.5 million).

Capcom estimates 97 billion yen ($982.1 million) in net sales and 12 billion yen ($121.5 million) in operating income for the next fiscal year ending March 31, 2014. The company plans to achieve its forecast by directing its development resources to the development of online games (mobile, PC online and downloads for consumer games), which is a growing area, and by launching major titles such as Monster Hunter 4 and Lost Planet 3 focused on the domestic and overseas markets respectively. (more…)

EA reports $1.04B net revenue in Q4 2013, generates $104M from mobile

EA logoGaming giant Electronic Arts today reported $1.04 billion in non-generally accepted accounting principles (GAAP) net revenue for its fourth fiscal quarter of 2013, up 6.4 percent year-over-year from 977 million in non-GAAP net revenue from Q4 2012.

Sales of $1.04 billion were within the company’s guidance of $1.025 billion to $1.125 billion. Non-GAAP diluted earnings per share (EPS) were $0.55, which was slightly below its guidance of $0.57 to $0.72, while non-GAAP loss per share was $($0.17).

EA didn’t report a non-GAAP net loss in this quarter, but expects a non-GAAP net loss of $188 million and a non-GAAP loss per share of $0.62 for Q1 2014. Non-GAAP net income for the quarter was $169 million, up from $56 million from the same quarter a year ago. Non-GAAP digital revenue for the 2013 fiscal year totaled $1.7 billion.

Overall, the company’s non-GAAP digital revenue for Q4 2013 amounted to $618 million, up from $425 million in Q4 2012. Revenue from mobile, including handhelds, contributed approximately $104 million to this total.

“We remained focused on this segment due to the significant growth in the smartphone and tablet market,” says Blake Jorgensen, chief financial officer of EA, in today’s earnings call. (more…)

CEO Mark Pincus elaborates on Zynga’s transition from web to mobile, announces today’s launch of Draw Something 2

Zynga-LogoIn Zynga’s Q1 2013 earnings call, CEO Mark Pincus’ opening statement  focused on Zynga’s transition from web to mobile. “Our next opportunities are clearly on mobile,” he says.

Pincus laid out three key concepts for Zynga now and moving forward. He says Zynga is focused on building games, a network and working on profitability.

On the games front, Zynga’s most recently released mobile game, midcore card battler War of the Fallen, is monetizing 15 times higher compared to Zynga’s “With Friends” franchise, Pincus said.

“We’re following a playbook proven on the web to lead on mobile with a disciplined approach. We’re encouraged by early execution,” Pincus says.

Pincus also announced Draw Something 2, the sequel to Omgpop’s hit Pictionary-like drawing game Draw Something, is launching today. The sequel was first revealed in a Tweet by radio and TV personality Ryan Seacrest back in March.

As for Zynga’s network, which consists of 253 million monthly active users (MAU) across all platforms, Pincus says that the company has 65 million MAU on mobile. To demonstrate the power of Zynga’s mobile network, Pincus says word game What’s the Phrase, the company’s only mobile release in Q1, reached the No. 1 spot on the top free iOS apps charts, two days after the company turned on cross-promotion for the game within its network.

“The best way that we can be competitive in the market and positively move customer acquisition is by investing in our network and by better leveraging our large audience,” says Pincus, in the Q&A portion of today’s earnings call.

Since Zynga already has a strong user base on the web, Pincus says Zynga will continue launching cross-platform games that connect web and mobile users, a strategy that has worked for other companies such as King.

Aside from Zynga’s release of What’s the Phrase in the U.S., the company did launch two real-money gaming titles — Zynga Plus Poker (review) and Zynga Plus Casino (review) — in the U.K. in April. Both games are powered by real-money games operator bwin.party.

Later this quarter, Zynga plans to launch a casual title for mobile called Running With Friends, an endless runner game, which has already soft-launched in Canada, and action role-playing game Battlestone, which we reported on at the end of 2012.

Rovio’s revenues double in 2012 to €152.2 million

Rovio Angry Birds assetRovio today revealed its financial results for 2012, reporting revenues of €152.2 million ($195.5 million), a twofold increase from revenues in 2011 of €75.6 million ($97.1 million).

Profits were also up year-over-year from €35.4 million ($45.5 million) in 2011 to €55.5 million ($71.3 million) in 2012. Rovio also doubled the size of its company during 2012, from 224 employees to 518.

Rovio launched four games in 2012 — Angry Birds SpaceAmazing AlexBad Piggies and Angry Birds Star Wars. The games helped Rovio surpass the one billion download mark by May 2012, and the total number of monthly active users across all platforms to 263 million in December 2012. In total, Rovio’s total number of game downloads has exceeded 1.7 billion. Rovio says its main revenue channels were paid games, virtual goods and advertising. Lastly, Rovio’s Consumer Products business unit, which creates the Angry Birds-branded merchandise such as toys, plushes and board games, accounted for 45 percent of the company’s revenue in 2012, up from 30 percent in 2011.

Recently, Rovio launched Angry Birds Toons, its cartoon series based off the company’s hit franchise, and The Croods, its most recent game based off DreamWorks’ animated feature but does’t have any Angry Birds affiliation.

The Espoo, Finland-headquartered company says the future of its business in 2013 will depend on successful new game launches, keeping fans engaged with its content and the success of new initiatives.

“We have had a stellar start for this year,” said Rovio CEO Mikael Hed, in a statement. “In addition to our successful games portfolio we recently launched our first Angry Birds Toons series through third party partners and our own in-game distribution channel. We will continue to strengthen our position in the entertainment business through continuing to innovate on our existing brands, exploring creating new IP as well as exploring opportunities with external parties.”

Puzzle & Dragons estimated to generate between $54M to $75M a month in Japan, says Japanese press

Japan’s top grossing free-to-play mobile game Puzzle & Dragons for iOS and Android is estimated to generate between five billion yen ($54 million) to seven billion yen ($75.5 million) a month in the country, according to the Japanese press as translated by industry watcher and analyst Dr. Serkan Toto.Puzzle & Dragons app icon

The estimated revenue range is based off a financial document for January 2013 that accompanied game company GungHo Online’s financial report for the 2012 fiscal year. According to the report for the fiscal year of 2012, the company saw sales grow 168.8 percent year-over-year to $280 million and operating profit increase 690.1 percent to $99 million.

In January 2013 alone, the company revealed that it saw sales of 8.5 billion yen ($92 million), a 1002.4 percent increase year-over-year. GungHo didn’t provide a platform or a specific game in its portfolio for the figures it saw last month, but that didn’t stop the Japanese press from publishing estimates about the amount of revenue Puzzle & Dragons contributed toward the $92 million GungHo saw in January 2013.

“There is absolutely no doubt in the industry over here that one game only — Puzzle & Dragons — is the main driver behind this growth,” Toto says on his blog.

The three Japanese outlets to publish estimates included Inside Games’ estimate of seven billion yen ($75.5 million), Projetista’s estimate of six billion yen ($64.6 million) and Popular Social App and Game Analysis Blog’s estimate of five billion yen ($54 million. The three estimates average out to $64.7 million, translating to about an average of $2 million in revenue per day from Puzzle & Dragons. In comparison, Finish developer Supercell was reported to be generating $1 million in gross revenue a day from two games — Hay Day and Clash of Clans. Also, Electronic Arts’ The Simpsons: Tapped Out pulled in $23 million in three months.

The puzzle and RPG hybridPuzzle & Dragons, which added moved from seven million to eight million registered users in 12 days, is a puzzle and RPG hybrid game which first launched in Japan for iPhone in February 2012 and in the U.S. in November 2012. In spite of this popularity in Japan, the game still has yet to find a sizable audience here in the States, though it’s already starting to see similar titles appear in North America like Renren’s new puzzle game Merlin’s Rage.

GungHo, known for hosting the servers for massively multiplayer online role-playing game Ragnarok Online, currently has a market cap of $2.9 billion, more than Zynga’s $2.5 billion and GREE’s $2.8 billion, but well below DeNA’s $3.6 billion market cap.

This story originally appeared on our sister site Inside Mobile Apps.

Zynga’s earnings report for Q4 2012 shows $311 M in revenue, $48.5 M loss

zyngaearningsToday, Zynga reported it made $311,165 in revenue, with $261,269 million in bookings for Q4 2012. In terms of revenue, that’s flat year-over-year while bookings were down by 15 percent year-over-year (but up 2 percent from Q3 2012).

Zynga’s earnings report shows it had a net income loss of $48,561 million; up from Q4 2011’s loss of $435 million (though the company could really go up from there), which was due to a $510 million stock-based compensation charge tied to its IPO in December 2011. As a result, Zynga’s Q4 2012 was decidedly up from the $52.7 million loss in Q3 2012. The diluted net loss per share was ($0.06).

Zynga’s GAAP (generally accepted accounting principles) results show the company ended the year with a net loss of ($209.4) million. Diluted net loss per share for the year was ($0.28). This loss included $282 million stock-based expense and $49.9 million of income tax expense.

Following last quarter’s lowered 2012 guidance, the company was able to actually beat its projected estimated bookings between $1 to $1.1 billion (though this amount was already $500 million less than original projections for the year). The company’s total net revenue for 2012 was $1.28 billion, while bookings managed to reach $1.15 billion.

Zynga’s outlook for Q1 2013 projects revenue to be between $255 million and $265 million, with a net loss of between ($32) million and ($12) million. As a result, it predicts EPS will be in the range of $(0.04) to ($0.02). Bookings are projected to be in the range of $200 million to $210 million.

In this afternoon’s earnings call, CEO Mark Pincus spoke about the company’s renewed focus on creating mobile games, both with original IP and adapting mobile titles from established web games. Pincus went on to say the company’s “number one focus” will be on mobile development. That said, Zynga’s established web games are still making money; the biggest example was the news that FarmVille had passed the $1 billion mark in terms of total user in-app purchases.

Pincus also said 2013 would see a major push from Zynga into the mid-core markets, based on how profitable the genre’s proven to be.

Leading up to today, analysts have been split with their predictions for how Zynga’s earnings would go. The ongoing success of FarmVille 2 (which was recently dethroned as the No. 1 game in terms of daily active users but still reigns supreme with monthly active users) and CoasterVille’s recent surges in traffic are certainly feathers in the company’s cap, but things like Zynga shutting down a number of underperforming titles and the disappearance of high-profile sequel CityVille 2 from the charts (the performance likely recreating a sense of deja vú for anyone who watched The Ville flounder) were considered warning flags.

chart_1

Outside factors fueled some analysts’ wary outlooks. EA’s lackluster earnings report last week, which eschewed any mention of social titles in favor of mobile development, has been taken by some analysts as a sign of the continuing decline of social games. Additionally, Facebook revealed on Friday that Zynga’s impact on the social network’s revenue was continuing to shrink.

As has been the case in past quarters, Zynga still has a lot of cash, cash equivalents and marketable securities on hand. Currently, the company has $1.65 billion in these, down from the $1.92 billion it had in Q4 2012. Zynga also doesn’t have any short term or long term debt, according to Bloomberg. Cash flow from operations in Q4 2012 was ($114.3), or $119.4 million excluding the purchase of the company’s headquarters in San Francisco.

Zynga’s partner publishing program has begun picking up steam, but its effects still haven’t really started to make much of an impact on the company’s bottom line. Although some of the early partners have games now playable on Zynga.com’s platform and/or Facebook, Zynga hasn’t turned on the full effect of its cross-promotion power to benefit these titles (many of which seek to tap into the lucrative core gamer market).

Over the past quarter, Zynga had three major releases to help FarmVille 2 bring home the bacon: CityVille 2, CoasterVille and Bubble Safari Ocean. It didn’t take long for CityVille 2’s traffic to nosedive (it only appeared on our Top 25 Facebook games lists before it completely disappeared from them), but CoasterVille and Bubble Safari Ocean are still sitting fairly high up on the list of top-performing Facebook apps. CoasterVille currently holds the No. 2 spot among facebook apps in the 10 million MAU tier and the No. 11 placing in the 1 million DAU tier. Bubble Safari Ocean also sits in the 10 Million MAU tier with the No. 24 spot and the 1 million DAU tier at No. 61.

chart_1 (1)

According to Zynga, its number of daily active users shrank 6 percent from 60 million in Q3 2012 to 56 million, though that is up from Q4 2011 when the company had 54 million DAU. Monthly active users also increased year-over-year from 240 million in Q4 2011 to 298 million in Q4 2012. However, MAU was down 4 percent from Q3 2012, when the company had 311 million MAU. Monthly Unique users were also down from last quarter, dropping from 177 million to 167 million, though this is still up from Q4 2011 with 153 million.

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