Zynga doesn't need to be "saved"

Zynga had a rough day today, reporting a fair earnings but enduring tough questions from investors and brutal after hours trading. Between Facebook's shifting platform and adjusted expectations for its game roster, many critics are looking at the company as something to be both scorned and wary of. But is the company actually that bad off? It was mentioned during the earnings call that Zynga released six games this quarter and is currently working on a real money gambling title, due out sometime during the first half of 2013. Not much is known about this project right now, but it was stated that the game will target international audiences first. This isn't surprising since no one is exactly sure when online gambling will be legalized in the United States (though the common consensus is sometime before 2014) and the issue will likely be complicated by each state enacting its own laws around the issue. Meanwhile, our story about Zynga looking to snap up midcore developers was all but confirmed when it was stated the company was planning to bring in more male players. Some people think these moves will "save" the company, but it doesn't actually need saving. Zynga revealed it made $332 million in revenue and $302 million in bookings for the quarter. While that's down by roughly 5 percent from Q1, when the company reported its highest ever bookings, both Zynga's bookings and revenue are up 10 percent year-over-year. Advertising, meanwhile, was up 45 percent from last quarter to $40.9 million, a 170 percent increase year-over-year. It was also revealed that the company has over $1 billion in cash on hand. Traffic wise, the company is also doing well. Monthly active users are up 4 percent from Q1 and by 34 percent year-on-year to 306 million. Daily active users, meanwhile are up 23 percent year on year and by 16 percent from last quarter to 72 million. Taking all of this into consideration, Zynga's being judged too harsly. Traffic continues to increase, revenue and bookings are still large (even from older games like FarmVille) and the future plans will undoubtedly increase the developer's audience. Zynga's doing fine, investors just don't seem to realize this right now.

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Zynga doesn't need to be "saved"

Mike Thompson

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Mike Thompson