Tag Archive: Gaming


zynga-logo

Zynga’s revenues for the second quarter of 2013 declined 31% year-over-year to $231 million in the midst of a challenging transition that saw former CEO Mark Pincus hand over the reins to Don Mattrick.

The company had a net loss of $16 million compared to last year’s net loss of $22.8 million during the same quarter (which also had $95.5 million of stock-based compensation expenses). If you account for that then, the company’s net loss was $6.1 million compared to last year’s net loss of $4.6 million based on non-generally accepted accounting principles. Zynga said when it laid off nearly 20 percent of its staff last month that it expected to see a net loss of between $39 million to $28.5 million so this is actually a slight earnings beat.

“We need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company,” wrote Mattrick in the release. “We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters.”

Last quarter, COO David Ko said the company was in the midst of a “pause” to re-evaluate its entire game slate and that this decision would be financially apparent in this quarter.

This quarter’s revenue is projected to be even lower in the range of $175 million to $200 million, with a net loss of $43 million to $14 million.

Through the company’s pivot onto iOS and Android, Zynga has had to compete against older and historically smaller rivals from the Facebook platform like King and Kabam. Both of those companies have fared well with King’s Candy Crush Saga bringing it the top grossing spot and numerous Kabam titles in the top 25.

In contrast, Zynga just has its longstanding Poker franchise in the U.S. top grossing 25. Even today, nearly 70 percent of the company’s monthly active users remain on the web.

The losses in Zynga’s user base from not being able to hold onto its core Facebook customers are staggering. The company’s level of daily active users is not much higher than half of where it was a year ago at 39 million this quarter compared to 72 million in 2012. It also saw 187 million monthly active users, down from 306 million users in the same time period a year before.

The company’s launches like Draw Something 2 have also underperformed without any slots in any of the top 100 charts and Zynga’s other big mobile launch, Running With Friends, remains in 45th place in the U.S. top grossing chart. Zynga had six major releases this quarter including War of the Fallen, Draw Something 2, Battlestone, Solstice Arena and Running With Friends.

But older franchises like FarmVille and FarmVille 2 continue to do well as both games have grown combined bookings by 29 percent year-over-year.

Zynga’s struggles in diversifying away from Facebook and missing the pivot to mobile ultimately convinced Pincus to give up the CEO role, although he remains chairman of the board and serves as chief product officer. It’s now Mattrick’s 15th day on the job.

zynga poker

Zynga is giving up what many investors had hoped might be its trump card: a real-money gaming business in the U.S. The company, which has been testing out real-money casino games in the U.K., said it won’t be pursuing a U.S. license after all in its second quarter earnings report today.

Sources tell us this is a decision to focus and not spread the company too thinly between real-money gaming, diversifying onto mobile and maintaining a core on Facebook. If it weren’t for the political and legal complexities of opening up real-money gaming in state after state, the business could have been interesting for Zynga, especially considering how long Zynga Poker has dominated both on the Facebook platform and on iOS and Android. None of Zynga’s social casino games, which use virtual currency, are affected by this. Shares declined 13 percent in after-hours to $3.02.

In the release today, Zynga said:

Zynga believes its biggest opportunity is to focus on free to play social games. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.

Zynga has long been exploring real-money gaming. It partnered with operator Bwin.Party to offer titles in the U.K. Then last November, the company took its first steps toward real-money gaming in the U.S. by applying for a “preliminary finding of suitability” from the Nevada Gaming Control Board.

It’s not that this option is forever off the table. It’s just that the company is in the middle of a significant platform transition now, and real-money games – which would probably only be available to players in Nevada at first anyways – could be distracting.

Interested in checking out what the multimedia interface screens of the PlayStation Vita will look like when it is finally released? Since most of us don’t have access to one of the consoles now, screenshots of the console in action will have to do. Thanks to the folks over at andriasang.com, they’ve published 9 screen captures of what the Vita’s multimedia interface. For those of you who didn’t get a chance to demo the console at conventions, you’ll be able to tell from the images that Sony is going to make the Vita’s UI more touchscreen centric.

Those of you used to the original PSP UI will probably get used to more convenient features like an onscreen keyboard you can touch type with and buttons you can press by just tapping them with your finger. Let’s not forget things like scrolling, panning etc – it’s all going to be much more convenient with the use of a touchscreen. Check out the full gallery here.

mark-and-don

Don Mattrick, the new Zynga CEO announced at the beginning of the month, offered his initial on-the-job observations today during the conference call discussing the company’s second-quarter earnings.

Mattrick (on the right of the photo with Zynga founder and former CEO Mark Pincus) started out by offering some positive commentary, saying that the company “caught lightning in a bottle” and “achieved in only a few years what most companies took a decade or more to do.” However, he acknowledged, “We’re missing out on platform growth that Apple, Google, and Facebook are seeing. In short, we can do better.”

So how is he going to try to turn things around? He said he’s going to be working with the company’s leadership to “challenge previous assumptions” and to focus on “business fundamentals – which, candidly, we’ve struggled with over the past year.” Mattrick predicted that there will be two to four more quarters of volatility as the company tries to find a new direction.

“Getting a business back on track isn’t easy and isn’t quick,” he said.

Pincus, now Zynga’s chief product officer, was also on the call, and among other things, he said he was impressed that Mattrick set up his desk in the middle of the Farmville studios. Both Pincus and Mattrick described their relationship as one between “partners”.

Mattrick said he’s also going to discuss his priorities on this call – I’ll update this post when he does.

Update: Later in the call, Mattrick said his priorities for his first 90 days on the job include “getting under the hood” to evaluate the business, identifying the real market opportunities, improving product quality, looking at how people are deployed across the company, and reassessing the product pipeline. He also suggested Zynga is a young company that has “the ability to break some bad habits” but that while he’ll be in listen-and-learn mode initially, “When it becomes clear what change is necessary, I’ll move quickly and decisively to do what’s in the best long-term interests of our players, our employees, and our shareholders.”

He concluded, “There are some good winds at our back, and my job is to get our sails up and Zynga pointed in the right direction.”

Sony has confirmed that the PS Vita will be region-free, meaning that gamers should be able to import the handheld and games for it from Japan where it will launch first. Sony Worldwide Studios president Shuhei Yoshida revealed the spec tidbit on Twitter, though went on to caution against importing. Last week, it was revealed that the PS Vita would go on sale in Japan on December 17, though US availability has been pegged by retailers for only a couple of weeks after that.

“There are people who are interested in importing the Japanese version of PS Vita from outside Japan, but I personally do not recommend that” Yoshida suggested, going on to explain that “from my experience owning both US and [Japanese] game consoles of everything, there tend to be minor nuisances … Like inconsistency between the use of x and o buttons between system software and games.” Pressed by would-be Vita importers to explain, the exec pointed out that “It’s a legacy, but in Japan circle means “yes”, cross means “no”.”

Nonetheless, it’s likely that many will choose to import a PS Vita if the price is right, given Sony is yet to confirm release dates outside of Japan. In Europe, the console is up for pre-order with several retailers, but none are giving specific availability timescales at this point.

Including 4oD

Xbox Live is set to get a major televisual revamp before Christmas with all the major programming players in the UK due to launch Xbox based entertainment services.

Everything from 4oD and the BBC to Lovefilm and even Blinkbox and Channel 5 will be arriving on Xbox Live. This brings a total of more than 40 entertainment providers now involved globally with Xbox.

Sky already have a significant and highly successful presence on Xbox but expect the new 4oD and BBC offerings to offer some potential competition.

Channel 4 will launch a 4oD app for Xbox Live that will operate largely like its desktop client, allowing you to catchup on tv shows as well as watch older content.

The LoveFilm app should behave largely like that of the PlayStation 3 s, allowing members to stream on demand video to their console.

Microsoft went a bit entertainment partner mad, so much so that there are just too many to list here. If you fancy seeing a full list of Xbox Live entertainment providers then head over to the Xbox website.

Plain Vanilla Games, the studio behind mobile trivia game QuizUp, has raised a $2 million extension to its earlier $2.5 million Series A. The new funding, led by Sequoia Capital and eVentures, closed before QuizUp launched earlier this month. A spokesperson said that as of Monday, the game has 1.5 million registered users and has been played 70 million times.

Follow

Get every new post delivered to your Inbox.

Join 108 other followers

%d bloggers like this: