Zynga announced that they had a net loss of $22.8 million for the period ended June 30. Despite revenues climbing nearly 20 percent to $332 million, the stock fell over a third and is trading at just over $3.
Cutting into the company’s bottom line is an unexpected drop off in several of its games, reduced expectations for the recently acquired Draw Something, and a diminished gaming environment on Facebook on the whole. The good news for Zynga is that its daily active users (DAUs) increased 23 percent from 59 million in the second quarter of 2011 to 72 million in the second quarter of 2012 and monthly active users (MAUs) increased 34 percent from 228 million in the second quarter of 2011 to 306 million in the second quarter of 2012, while Zynga’s Monthly Unique Payers (MUPs) increased from 3.5 million in the first quarter of 2012 to 4.1 million in the second quarter of 2012.
“The company achieved some significant milestones in the quarter including the launch of Bubble Safari, which is now the number one arcade game on Facebook, and the launch of The Ville, now the number two game behind Zynga Poker,” said Mark Pincus CEO and Founder of Zynga. “Our advertising business continued to show strong growth with revenue up 170 percent year-over-year. Our games reached record audiences, achieving over 300 million monthly active users. We grew our mobile footprint five-fold in the year to 33 million daily active users making Zynga the largest mobile gaming network.”
“We also faced new short-term challenges which led to a sequential decline in bookings,” added Pincus. “Despite this, we’re optimistic about the long-term growth prospects on mobile where we have a window of opportunity to drive the same kind of social gaming revolution that we enabled on the web.”
