Mobile developer Zynga makes small games, but the company is getting big fast with a business model that treats its product more like a living service than a one-off purchase.
"Our focus is almost entirely on engaging players," COO Matt Bromberg told Cheddar. "Good things happen in the game business when you've got players who stay with you and play more."
More engaged players also mean more spending in an industry that relies on microtransactions within free-to-play games to generate revenue.
The San Francisco-based company, behind popular social games such as FarmVille and Words With Friends, turned in its strongest quarter yet with $404 million in revenue and $433 million in bookings, each up more than 60 percent year-over-year.
Zynga did see a net loss of $4 million in the last quarter, and earnings per share fell below consensus estimates, but the stock nonetheless jumped 13 percent after yesterday's report.
The company is in an expansion mode that has driven up costs as well as revenues.
Those costs were partly the result of a string of acquisitions that have bolstered Zynga's lineup of top-downloaded games. It purchased Gram Games and Small Giant Games in 2018, which brought with them blockbusters such as Empires & Puzzles, Merge Magic! and 1010!
The company has made eight other acquisitions since launching in 2007.
Bromberg said Zynga has a three-fold growth strategy: The first is creating new "forever franchises," or games that become a perennial presence on mobile phones.
The second is continuing to develop its live services. These are the games that provide constant upgrades and engagement in exchange for microtransactions within the app.
The third is investing in new platforms and technologies that will position the company to take advantage of shifting digital trends.
"We've seen growth and momentum in all three of the big areas we operate in," Bromberg said.
Online game transactions continue to drive growth, pulling in $325 million in the fourth quarter, while advertising trailed behind with $80 million. Bromberg noted that more immersive games lent themselves to microtransactions, while casual games were better for ads.
Zynga is banking on the broad appeal of its games to continue to build its customer base.
"More than half of our gamers are women," Bromberg said. "Many of our games are truly casual. We're not sort-of operating in this narrow niche of gaming which is male and younger."
The game developer expects to deliver $1.6 billion in revenue in 2020.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
With a merger this big, creators, studios, and theaters all face uncertain futures. Here’s what experts are worried about and what good could come from it.
With disengagement rising and hybrid work shifting, 'Everybody Matters' author Bob Chapman explains why treating people well could define the future of work.
We sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year.
