Zynga game user number declines despite a successful mobile expansion in 2015

Zynga, the popular social video game services provider saw a drop in overall audience despite claiming to have made significant progress in mobile expansions in the year 2015.

The gaming company reported revenues of $764.7 million during the 12 months through to December 31, 2015 from $690.5 million in the previous 12-month period; this was an 11% increase.

Improved Net-Income

While still at a loss, the figures for net income improved from a negative value of $225.9 million in 2014 to a negative value of $117.2 million in 2015. Diluted net income also saw an increase from a loss of $0.26 to a loss of $0.13 per share.

Booking for the year was slightly improved, to a little under $700 million. However, the company reported that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) had dropped 57% year-on-year from $39.9 million to $17.1 million.

Drop in actives

The company also noted a 25% fall in daily active users in the last three months of 2015; with average numbers falling from 24,000 in 2014 to 18,000 for the same period in 2015. Average monthly active users for the same period had also declined, by approximately 31%, from 98,000 to 68,000 players. Average monthly unique users fell by 25% from 64,000 to 48,000.

Mark Pincus, founder and chief executive officer at Zynga, stated that the loss of audience for Zynga seen in 2015 can be accounted for by the lack of new game releases in the year but the company has lined up ten new games for 2016 and hopes to boost figures with these fresh products.

Mobile improvement

Pincus also stated that the total booking for Zynga grew by 1% in 2015 and significant progress has been made in their transition to mobile. Overall mobile grew by 35% and the core live mobile franchises grew by a staggering 63%. He believes, Zynga will see profits driven by new releases and continued momentum with the live franchises such as Words with Friends, Slots and Poker. Six new games are already in soft launch for 2016. While they are confident the launches will be successful and would bring in new players the challenge will be to maintain long term retention and the lifetime value to support user acquisition at scale.

Zynga is a leading developer for social games. Founded in 2007, they have seen more than one billion people enjoy their popular franchises to date.

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