Despite the large losses, the year ended on a positive note for the American company.
Although, at first glance, the statement by Zynga CEO Don Mattrick that 2014 was a year of progress for the company with losses of $ 225 million can be taken as self-irony, if not sarcasm, however, in fact, everything is somewhat simpler.
The stated losses in such a solid figure are relevant only within the framework of American accounting standards (GAAP), outside of its framework (Non-GAAP), the situation abruptly becomes less dramatic, but about everything in order.
Over the past year, the company earned $690 million ($152 million in advertising). But they did not cover the costs of $935 million. By the way, the article “development and research” ate the most, namely $396 million. As a result, the company remained in the red by $225 million at the end of the year.
However, if we take into account a number of compensating factors within the framework of Non-GAAP, the losses are much smaller – about $ 12 million.
In any case, it’s definitely not worth burying Zynga yet. The fact is that in 2014, the company’s revenues from the mobile market increased by 80%: from $196 million to $353 million. The number of users also increased: the total mobile MAU jumped by 36% to 73 million.
However, this happened against the background of a drop in total indicators (those that included the company’s social games). But this, as far as we understand, was a completely conscious decision of the company, which decided to move at full speed into a bright mobile future.
If we go back to revenue, then Zynga has achieved stable growth, but its most important component is revenue from advertising, not from games.
The company also shared its plans for the coming year. After analyzing the box office top, she decided to focus on developing games in the “strategy” and “three-in-a-row” genres.
In the current quarter, the company plans to earn at least $155 million and lose no more than $60 million ($24 million under Non-GAAP).
As part of cost optimization, the company closed its Chinese studio. Zynga now has high hopes for new mobile projects.
The original financial report can be found here.
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- Zynga has released a release runner for the Looney Tunes franchise
- Zynga is a pioneer company in the social gaming market.
It was founded in 2007. The main capital earned on Texas Hold’em Poker (now Zynga Poker). In 2008, she collected investments of $29 million, which allowed her to acquire MyMiniLife, at that moment, who had just completed the Farmville time manager. In 2011, Zynga successfully entered the IPO, raising more than $1 billion during the placement of shares. Then the company continued its policy of acquiring promising companies. This led to a severe drop in income. As a result, in the summer of 2014, the founder of the company, Mark Pincus, resigned as CEO, giving way to the former head of Microsoft’s entertainment division, Don Mattrick.