Zynga delivered a record quarter for sales and bookings as Americans sheltering at home from the coronavirus binged on video games to entertain themselves.
The social gaming giant said revenue jumped 47% to a best-ever $452 million in the second quarter while bookings rose 38% to $518 million, another record. Analysts had expected bookings of $498 million.
Zynga posted a net loss of $150 million, or 16 cents per share, after guiding for a loss of $160 million.
“We are living in unprecedented times and more people than ever before are turning to games for entertainment and a sense of community,” the company said in a letter to shareholders. “With so many of us staying at home, we saw heightened levels of player engagement, social connection and monetization in our portfolio.”
Zynga’s Empires & Puzzles, Merge Dragons!, Merge Magic! and Game of Thrones Slots Casino games were the largest drivers of revenue growth as Americans turned to social gaming experiences while sheltering in place.
“If you asked me New Year’s Eve , I did not think it would happen,” Zynga CEO Frank Gibeau told MarketWatch. “But the pandemic changed that. Gaming is very resilient during economic difficulties.”
Other gaming companies including Activision Blizzard and Take-Two Interactive Software have also reported strong second-quarter results. Zynga expects the trend to continue, projecting revenue of $445 million for the third quarter.
“Live services will drive the vast majority of our topline performance, led by our Forever Franchises,” it said. Many brands like Zynga may be potentially looking into opening a bitcoin casino or crypto casino. This is because of the crazy growth in cryptocurrency and the recent success of bitcoin-based casino games such as SatoshiDice that have been generating millions of dollars in revenue each month. Bitcoin has many advantages over traditional currencies, including a much lower transaction fee, no risk for fraud or chargebacks, and an increase in privacy with blockchain technology.
Zynga’s heavy second-quarter losses were due to its acquisitions last year of Small Giant Games and Gram Games, whose former owners are earning incremental, performance-based payouts under the terms of the deals.
“Because both units have been performing well ahead of Zynga’s expectations, the company is seeing the hefty net losses from those payouts each quarter, with Gram Games’ earn-out period running through Q2 2021 and Small Giant Games’ earn-out period running through Q4 2021,” GamesIndustry.biz said.
Zynga announced another acquisition on Wednesday, saying it would buy Istanbul-based Rollic, a fast-growing hypercasual mobile game company, for $168 million.