Zynga Inc (ZNGA.O), which created the online game FarmVille, forecast current-quarter bookings largely below analysts' estimates, weighed down by a seasonally weak advertising business as well as declines in its web business.
The company forecast current-quarter bookings of $190 million, below the $206 million expected by analysts polled by research firm FactSet StreetAccount.
Bookings, an important metric indicating future revenue, include the sales of virtual goods such as currency and lives.
The current quarter also includes the impact of its much-awaited game, "Dawn of Titans", which was released in December.
The action-strategy game was the last of the 10 games Zynga committed to release in 2016. However, after a softer-than-expected performance in app charts, Zynga acknowledged it has some work to do to improve the game.
"It needs some more innovation, more work, to find its audience," Chief Executive Frank Gibeau said in an interview on Thursday.
The company, whose "FarmVille" once dominated games played on Facebook Inc (FB.O), has been seeing a decline in web users as players increasingly prefer playing on mobile phones.
However, Zynga reported bookings of $201.5 million for the fourth quarter ended Dec. 31, beating analysts' estimate of $195.2 million, according to research firm FactSet StreetAccount.
Zynga's average daily active users were 18 million, flat from a year earlier. Analysts had expected 17.8 million, according to FactSet.
The company said its growth in 2017 would be driven by investment in established games such as "Words with Friends" and "Zynga Poker", contributions from the ten games it released in 2016, and a handful of releases slated for launch.
The company's net loss narrowed to $35.4 million, or 4 cents per share, from $51.2 million, or 6 cents per share, a year earlier.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Maju Samuel)