Zynga revenues up 19% in H1 2015 but struggles continue
Social casino developer reports H1 revenues of $383.2m but player numbers continue to plummet
Zyngaâs social casino arm helped the developer report revenues above guidance in the first half of the year, despite player numbers continuing to plummet. [private]
Total revenues for the six month period were up 19% YoY to $383.2m while bookings increased slightly from $336.5m in H1 2014 to $341.9m this year.
Zynga said growth had been driven primarily by mobile in the second quarter, with the channel accounting for 66% or $115m of total revenues during the period.
In particular, the developer said its social slots offering had a âvery strongâ quarter on mobile with revenues up 274% YoY driven by its Hit it Rich! and Wizard of Oz Slots titles.
Zynga Poker, Hit it Rich! and Wizard of Oz Slots accounted for 18%, 16% and 10% of total online game revenues ($162m) respectively during Q2.
âThe approach that weâve taken in slots is to back a proven team against a clearly valuable category, develop a winning, repeatable engine, and then make a persistent, kind of patient investment over time,â Mark Pincus (pictured), Zynga CEO, said.
âAnd I think the way that story plays out is, that it takes a couple of years to create an overnight success,â he added.
But while the headline figures look promising, in reality H1 has been a mixed bag for the San Francisco-based firm, with EBITDA tumbling 90% YoY to just $3.1m.
Zynga attributed the drop to higher payment processing fees due to its increased mobile bookings mix, plus larger royalty expenses for licensed content.
Player metrics also suffered in Q2, with monthly active users down 32% YoY to 83 million, while daily active users fell 23% to 21 million during the same period.
The only upside was that average daily bookings increased 29% YoY to $0.09 while player conversion rates increase 5% sequentially to 1.6%, but were down 17% compared with Q2 2014.
The developer also said it was âmaking progressâ with its planned $100m cost saving program after announcing it would axe 18% of its global workforce at the end of Q1.
âIn terms of our people, we’ve made progress in moving to smaller game teams,â Pincus said. âWe believe this will allow them to be more nimble, creative and innovative.
âWe believe that social gaming has the opportunity to be as important a medium in people’s lives as social networking and social media.
âWe’re excited to deliver on that promise by getting back to our entrepreneurial roots, innovating on game mechanics and leveraging world class data and analytics to accelerate our path,â he added.
Zynga provided guidance on its Q3 2015 results, estimating revenues in the range of $175m to $190m with bookings between $155m to $170m, while EBITDA is expected to be a loss between $7m to $17m.