Zynga reports continued user growth, net income loss

Social gaming giant Zynga’s latest financial results have revealed a net income loss, despite continued user growth.

In its annual financial summary, the company said it experienced a net loss of US$403-million. It noted, however, that a large part of that loss was down to payouts it had to make to shareholders in the wake of its IPO.

Online gaming revenue continues to be a big money spinner for the company, accounting for US$1.07-billion in 2011. Although advertising revenue increased 226% year-on-year, it only brought in US$74.5-million for Zynga.

The company’s IPO was probably its biggest event in 2011, although it did push out 12 new games, “including 4 titles on web-based platforms and 8 titles on mobile platforms.”

Zynga says it experienced particularly strong growth in the mobile sector with Dream Zoo, Words with Friends, and Zynga Poker all charting in the top 10 iOS games during the fourth quarter of 2011.

Zynga’s user base meanwhile continues to grow steadily, with the company reporting that:

• Daily active users (DAUs) increased from 48 million in the fourth quarter of 2010 to 54 million in the fourth quarter of 2011, up 13%.
• Monthly active users (MAUs) increased from 195 million in the fourth quarter of 2010 to 240 million in the fourth quarter of 2011, up 23%.
• Monthly unique users (MUUs) increased from 111 million in the fourth quarter of 2010 to 153 million in the fourth quarter of 2011, up 38%.
• Average daily bookings per average DAU (ABPU) increased from $0.055 in the fourth quarter of 2010 to $0.061 in the fourth quarter of 2011, up 11%.
• Monthly Unique Payers (MUPs) increased from 2.6 million in the third quarter of 2011 to 2.9 million in the fourth quarter of 2011, up 13%.

Founder and CEO Mark Pincus said, “2011 was another milestone year for Zynga’s mission of connecting the world through games. We are seeing social games and more broadly play become one of the most popular pastimes on web and mobile. Zynga set new records in the year in terms of audience size, revenues and bookings. We saw great momentum in mobile and advertising and ended the year with a strong pipeline of new games. We are excited about the opportunities in front of us to continue delighting our current players and to bring play to millions of new people.”

Zynga shot to prominence as it used Facebook to leverage games like Farmville and Mafia Wars. The social network continues to be the platform on which it performs strongest, with its titles taking up the top five gaming places on Facebook.