July 31, 2019 / 8:15 PM / 4 months ago

'Empires', 'Dragons' drive Zynga's bookings beat

(Reuters) - Zynga Inc (ZNGA.O) on Wednesday reported higher-than-expected quarterly bookings on strength of its acquired mobile game titles “Empires & Puzzles” and “Merge Dragons!” and raised its 2019 forecast for revenue and bookings.

FILE PHOTO: The Zynga logo is pictured at the company's headquarters in San Francisco, California April 23, 2014. REUTERS/Robert Galbraith

The company said it expects to post its biggest annual revenue in eight years and highest bookings ever, powered by its strong line-up of game franchises, including “Game of Thrones Slots Casino”, in the second half of the year.

It raised full-year bookings forecast to $1.50 billion, from the prior forecast of $1.45 billion.

Zynga, once known for its Facebook-based desktop games such as “FarmVille”, has been focussing on mobile-centric games and on acquisitions of smaller studios such as Gram Games, Small Giant Games and the card and board games studio of Peak Games to fuel growth.

That strategy, plus network optimization, helped push the company’s second-quarter advertising revenue by 26% to $66 million. The company also launched “Empires & Puzzles” in South Korea and Japan during the quarter.

Chief Executive Officer Frank Gibeau told Reuters that live service games such as “Empires & Puzzles” and “Merge Dragons!” are gaining a lot of momentum this year.

Mobile revenue, which accounted for 94% of total revenue, rose 49% to $287 million in the quarter ended June 30.

Bookings, an important metric indicating future revenue, too shot up to $376 million, above analysts’ estimate of $361.3 million, according to four analysts polled by Refinitiv.

The company, which is testing three new games - “Puzzle Combat” from Small Giant Games, “FarmVille 3” and “Merge Magic!”- in soft launch, said it expects third-quarter bookings of $380 million, above estimates of $363 million.

Zynga, however, missed on the average number of daily active users, which came in at 21 million versus estimates of 23.2 million.

The company reported a wider net loss of $55.8 million, compared with $911,000 a year ago, as it invested more on marketing, R&D and launching new games, it said.

Reporting by Sayanti Chakraborty in Bengaluru; Editing by Shinjini Ganguli

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