Zynga: Yeah, Mobile Quintupled in 2011
In its latest earnings call, Zynga (NASDAQ:ZNGA) announced its mobile users had jumped dramatically over the course of 2011, increasing five-fold since this time last year. Perhaps even just as important: much of that growth was weighted towards the later part of the year. By the end of the third quarter, Zynga had about 9.9 million users — the rest came in the fourth quarter, with December alone seeing a jump by about two million.
The cause for the weighted increase was almost certainly due to the company’s launch of five new mobile games in the latter part of the year, which included the iOS versions of popular games like Mafia Wars and ForestVille. The company released eight new games over the course of the year, and three of those games, Zynga Poker, Words with Friends, and Dream Zoo, were among the top ten grossing iOS games in the fourth quarter. Mobile revenue for the company reached record highs, as well as saw more people spending more while playing games. Finally, Zynga also touted their games’ relatively high user ratings, which presently average 4.3 stars out of 5.
The company has been gaining revenue from ad sales online, but the ad revenue from mobile has also been increasing comfortably, according to CFO Dave Wehner. The company is even monetizing some mobile games higher than their online counterparts. COO John Schappert called mobile “another canvas to grow” since devices are becoming more powerful and smartphones more common.
“We’re seeing mobile as a big opportunity…we’re going to see more games coming,” says Schappert. On the evidence of such rates of growth, it seems likely that mobile will be a prime focus for Zynga as 2012 progresses.
Here’s how shares of Zynga are reacting to the news:
Zynga, Inc. (NASDAQ:ZNGA): ZNGA shares recently traded at $12.56, down $1.79, or 12.47%. They have traded in a 52-week range of $7.97 to $14.55. Volume today was 18,029,824 shares versus a 3-month average volume of 13,907,400 shares. The company’s trailing P/E is 169.59, while trailing earnings are $0.07 per share.
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