Zynga losses could speed-up real-money gaming entry
COO admits cash gaming is "very interesting" as company posts $404m loss in FY2011.
Social gaming operator Zynga has posted a net income loss of US$404.3m in its full-year results for 2011, the first figures released since the company’s $1bn initial public offering (IPO) in December last year, with COO John Schappert admitting the company is “interested” in exploring real-money gambling.
The losses came despite a 91% rise in revenues for the year, with daily active users (DAU) up 13% in Q4 2011 to 54m, from 48m in 2010, and monthly active users (MAU) up 23% to 240m in the same period.
EBITDA saw a 34% year-on-year drop, down from $103m to $67.8m for 2011, with rising sales and marketing costs and significant investment in product development blamed for the fall. Business Week reported that Zynga’s sales and marketing costs had risen to $112.2m – almost three times higher than in 2010.
Despite Zynga Casino general manager Lo Toney telling eGaming Review that the company had “no plans” to introduce real-money gambling last year, COO John Schappert admitted during an analyst call that the sector is “very interesting”. This follows rumours in January that Zynga is looking to partner with gaming operators to develop a real-money offering.
The company has invested heavily in product development, launching 12 games over the course of the year as well as developing its own cloud-based Cloud Z technology platform, with Zynga Bingo beta-launched in January. Project Z, the company’s stand-alone social gaming site is also in the beta testing phase and is preparing for a live launch in the coming months.
Mobile gaming has also grown significantly with Dream Zoo, Zynga Poker and Words with Friends among the top 10 highest-grossing games on the iOS platform during Q4, with Zynga’s mobile user base around five times larger than in 2010.
Founder and CEO Mark Pincus (pictured) described 2011 as “another milestone” for the company: “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,” he added.