Zynga profits slump as shift to mobile continues
Profits down 54% to $17m in FY 2015, acquires free-to-play developer Zindagi Games
Zyngaâs transition to a mobile first developer has hit the San Francisco-based firm hard, with full year 2015 profits down 54% despite a solid performance from its social casino arm. [private]
Revenues from online casino were up 10% year on year to $590 for the 12 months ended 31 December 2015, with bookings up 1% to $700m.
But the firmâs shift to mobile saw adjusted EBITDA fall from $39.9m for FY 2014 to $17.1m this year due to higher payment processing fees on mobile and increased expenses relating to licensed content.
The operator said it had made âgood progressâ in its transition to mobile with the channel accounting for 73% of total bookings in Q4, but a lack of new releases led to an overall decline in its audience.
In the fourth quarter, average DAUs were down 24% to 18 million while average MAUs fell 30% to 68 million, however average bookings per average DAU grew 31% YoY to $0.11.
Payer conversion rates also increased, up 7% to 1.7%.
The developer said its slots division delivered its highest quarterly bookings to date, up 78% YoY helped by the launch of Princess Bride Slots and Black Diamond Casino.
Zynga plans to launch four new slots titles in the first half of the year; Spin It Rich!, Willy Wonka Slots, True Vegas and Vegas Diamond Slots.
But despite the drop in EBITDA the firm has snapped up free-to-play game marker Zindagi Games for an undisclosed sum, according to its FY 2015 financial report.
The firm said growth would also be driven by its Zindagi acquisition, with plans to launch two new match-3 games by the end of the quarter.
âOverall for the year, we managed to support a relatively large slate of new game development and user acquisition while remaining profitable,” Zynga CEO Mark Pincus (pictured), said.
âFor 2016 and beyond, growth and profits will be driven by our ability to continue our momentum with live franchises and execute on new game launches.
âWhile we get that Zynga has been a show me story, in 2016, we have better visibility into our slate than ever before,â he added.
For the first quarter of the year, Zynga said it expects revenues of up to $175m, bookings of up to $175 and an EBITDA loss of $10m.