Zynga Still Struggling As Q1 Results For 2014 Released
Zynga continues to struggle with their release of the Q1 earnings of 2014. Following their Q4 report of 2013 it comes as no surprise that newly appointed CEO Don Mattrick continues to put a positive spin on what otherwise would be apparent to everyone else as a serious problem. The overall theme to Zynga’s latest results is that things are turning around slowly but surely despite massive losses compared to the same period last year. Before going into details the bottom line is that investors seem to be buying into Mattrick’s vision and recovery plans for the gaming giant as shares were up by more than 4 percent on the release of the 1st quarter results. Once again the expectations were so low for Zynga that when the losses were not as dire as predicted investors were somewhat pleased.
Some of the highlights or low-lights depending on if you are on same wavelength as CEO Mattrick include an increase of 1m Daily active users for the quarter to 28m which is 1m more than the previous quarter. However in the same period last year Zynga had 53m DAU’s. The number of Monthly active users for the quarter was 86m compared to 150m in the same quarter last year which in reality means Zynga lost half of their players.
Revenues were down to $168m for the quarter which is 36 percent down from the same period last year and a decrease of 5 percent from Q4 of 2013. Zynga reported a net loss of $61m for the Quarter which is a drop from the $4m net income from the Q1 of 2013.
One of the few objective positives of the quarter results was that of Zynga Poker which recorded a sequential growth for the first time in seven quarters with its mobile audience reporting a 19 percent rise. Mattrick went on with his optimistic vision for the company’s future,” In Q1 our teams delivered a solid start to the year against our strategic frame of growing and sustaining our franchises, creating new hits and driving efficiencies. We have established a strong base for 2014 and believe we are pacing well for a year of growth.”
In another excepted and some would say overdue move founder and former CEO Mark Pincus will leave his role as chief product officer which will end his executive duties at the firm.
Once again it has to be pointed out that even Pincus himself has admitted publicly that one of their fatal strategic mistakes which led to their collapse was due to them not focusing enough resources on the mobile market from the beginning. Today it is almost inconceivable that any online gaming firm would not start their business with mobile as their primary focus. Added to the problem was Zynga’s dependency on Facebook which cost them heavily when their partnership was broken up.
There is one thing that cannot be taken away from Zynga and that is their pretty honest forecasts in which they still are not promising a return to profitability in the near future. The road to recovery is long but according to CEO Mattrick will be worth the wait as Zynga is making all the right moves.