Zynga’s not so shitty third quarter: Farmville 2 to the rescue

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Things haven’t been so great for Zynga in the last couple of days: the social gaming company laid off five percent of its workforce, closed down its Boston offices and is considering closing down its UK and Japan studios. It’s a tough time to be founder and CEO Mark Pincus, but according the company’s third quarter earnings report, it seems things may be looking up.

The social gaming company reported US$317-million in revenue for the third quarter, up three percent year-over-year. It also reported a net loss of US$52.7-million which is less than what the company had thought it would lose this quarter. In a release earlier this month Zynga said it was expecting its third quarter revenue to be between US$300-million and US$305-million and a net loss in the range of US$90-million to US$105-million.

The better-than-expected results seem to breathe new life into the San Francisco-based company, which saw its stocks rise by 15% in after hours trading.

“While the last several months have been challenging for us, Zynga remains well positioned to capitalize on the growth of social gaming. We’re implementing a number of steps to drive long-term growth and profitability,” Pincus in a release.

“The successful launches of FarmVille 2 and ChefVille in the third quarter demonstrate that when we develop great games, our large player audience engages. It’s more clear than ever that along with search, shop, and share, play is a fundamental pillar of the internet, and Zynga continues to be the leader.”

Zynga wasn’t the only one expecting the company to have a shitty third quarter, following the decline in popularity of games like Cityville and Castleville, analysts predicted the company’s revenue at an average of US$291.5-million, according to Bloomberg.

To combat this, the company decided to lay off staff which it hoped would save the company somewhere between US$15-million to US$20-million this quarter, although will incur US$$8-million to US$12-million in restructuring charges. But Zynga hopes the whole programme will save between US$60-million and US$80-million annually, according to tech news site Techcrunch.

In another money-making move the company has joined forces with a casino gaming company in the United Kingdom to bring online casino gaming the that country. It also plans to buy back US$200-million in stock.

Things are picking up a bit for Zynga, according to the founder, FarmVille 2 and ChefVille are number one and three on Facebook. Apparently FarmVille 2 hit a new high of US$950 000 in purchase volume in a one day, reports All Things D.

Some highlights from the third quarter report:

  • Daily active users (DAUs) increased from 54-million in the third quarter of 2011 to 60-million in the third quarter of 2012, up 10% year-over-year.
  • Monthly active users (MAUs) increased from 227-million in the third quarter of 2011 to 311-million in the third quarter of 2012, up 37% year-over-year.
  • Monthly unique users (MUUs) increased from 152-million in the third quarter of 2011 to 177-million in the third quarter of 2012, up 17% year-over-year.
  • Average daily bookings per average DAU (ABPU) decreased from US$0.058> in the third quarter of 2011 to US$0.047 in the third quarter of 2012, down 19% year-over-year
  • Monthly Unique Payers (MUPs) decreased from 4.1-million in the second quarter of 2012 to 3-million in the third quarter of 2012, down 28% sequentially, largely driven by Draw Something.
  • Zynga launched four games during the third quarter of 2012, including two titles on web-based platforms: ChefVille, a social ‘ville-style cooking game, and FarmVille 2, Zynga’s next-generation game built entirely in 3D and the new chapter in its FarmVille legacy; and two titles on mobile platforms: Gems With Friends, the sixth title in the With Friends franchise, and Montopia, a role-playing game that challenges players to collect monsters through an adventure.
  • They are seeing positive early results from the recent launches of ChefVille and FarmVille 2. FarmVille 2 already has 60-million monthly active users according to AppData with approximately 500 000 unique payers.
  • As of September 30, 2012, Zynga held five of the top ten games on Facebook, based on DAUs as reported by AppData, including some of its most established titles, Words With Friends and Zynga Poker, and some of its newest games, Bubble Safari, ChefVille, and FarmVille 2.
  • In the third quarter of 2012, Zynga continued to expand its platform offering for third-party publishers and introduced players to new gaming genres, launching five partner games on Zynga.com — Sava Transmedia’s Rubber Tacos, RocketPlay’s Sports Casino, Majesco Entertainment Company’s Mini Putt Park, 50 Cubes’ Fashion Designer, and Row Sham Bow’s Knights of the Rose. The company also welcomed nine new partners, including Antic Entertainment, Big Bite Games, CrayonPixel, Eruptive Games, JamRT, The Method, Playnery, RocketPlay, and TikGames. Zynga’s third-party mobile offerings also took flight with its first game launch — Horn by Phosphor Games.
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