Zynga Games Posts Rare 3rd Quarter Profit


ZyngaLogoMuch of the world knows of Zynga through their wildly popular games like Words With Friends and Farmville 2, which continues to be one of the top 5 highest grossing games on Facebook. But what many may not know, however, is that web games such as those represent only a small fraction of the media giant’s overall revenues. In spite of the wild popularity of such games, they actually only represent a mere 16% of the company’s overall revenues. The majority of the company’s revenues are actually derived from casino games.

Still, 16% is a strong enough share to keep investing in new non-casino games, such as the new action strategy game Empire & Allies. So far, Empire & Allies has actually not performed up to the company’s high expectations for it, but the monetization has still been strong enough for the company to continue to pursue and invest in a number of non-casino titles. The release dates of their newest offerings, Dawn of Titans and CRS2, have both been pushed back to next year, however. Apparently the company wants to spend more time boosting the presence of each title on social media before officially launching.The real money-maker of the game provider is, however, their casino games. Because of the growing popularity of and demand for casino games, Zynga was able to pull off the rare feat of actually posting a profit in the third quarter of 2015. Gaming revenue itself actually fell 8% in the third quarter, but advertising revenue more than made up for it with a gain of 18%.Mobile gaming and apps actually offer a number of different avenues for profit, including purchase of the game itself, advertising and bookings, which are the sale of virtual goods such as bonus spins, extra turns or other virtual products which enhance the game playing experience and sometimes give players a leg up over other players. The sales themselves remained relatively flat, bringing in a steady $176 million. What did change, however, was the number of mobile bookings, which rose by 26% and gave mobile bookings a 69% share of total bookings overall.

One of the fastest growing segments of the online casino industry is slots, which are gradually increasing in their share of gaming revenue overall. Two of Zynga’s slot offerings alone: Hit It Rich! Slots and Wizard of Oz Slots accounted for a full 16% and 12% of gaming revenue respectively. Also popular was Zynga Poker, which accounted for 17% of gaming revenue, but it actually showed a full point decline from the same year-on-year period, while the slot offerings jumped two full points.

All told, slot bookings showed a 123% rise year-on-year but also a 2% sequential decline. However, with Zynga’s recent purchase of Rising Tide Games, they are expecting that Rising Tide’s new Black Diamond Casino which was launched in Q3 will bring their numbers back up again. They are also looking to Princess Bride Slots which will be released in Q4 to aid in that process as well.