Entertainment-hungry Americans are seeking some form of escapism in a world that has suddenly changed in form: bereft of sports, outdoor musical events, and popular flicks, giving Zynga Inc. the advantage.
On Wednesday, the San Francisco-based video game publisher posted a sales bump that Zynga chief executive Frank Gibeau described as "a broad-based victory" in a MarketWatch phone interview before the results were made public.
The corporation headquartered in San Francisco reported sales of $403.8 million for the March period, with a guided $385 million in revenue. Zynga lost 14 cents a share on revenue of $265.4 million in the same period last year.
Zynga estimates to shed 6 cents a share on $400 million in sales for the second quarter. It lost 6 cents a share on sales of $306.5 million in the same time in 2019.
While the rise in mobile gaming attributable to the pandemic has been positive for the business in the quarter's last two weeks, Zynga hasn't seen any major hits that launched for the quarter.
But in terms of expenditures, the payouts to Gram Games and Small Giant Games set the stage for a bigger than projected decline. The issue was that, as a result of accounting policies, Zynga cannot chart the sales for the acquired firms as fast as it is supposed to recognize the costs.
Although Gibeau acknowledged the global economy is in a "totally unfamiliar territory," he disclosed that a huge number of individuals have been "reactivated" back into the habit of playing, and estimates a major part of the momentum from shelter in place playing will be evident in the second quarter, equating to decent streams of earnings.
Zynga's increase in profits follows similar reports from bigger game companies, like Electronic Arts Inc. and Activision Blizzard Inc., both of whom posted robust earnings late Tuesday.
For the whole year, Zynga anticipates to drop 25 cents per share on $1.65 billion revenue. Zynga's profits last year were 4 cents per share on $1.32 billion revenue. The company makes popular games like the CSR Racing, Merge Dragons, Empires & Puzzles, Zynga Poker, and Words With Friends.
According to Gibeau, it is a weird time for the world: "Games have really stepped to the forefront to become a great way to keep everyone connected and socializing and playing," he said.
Gibeau pointed out that this is perhaps the most meaningful moment in terms of what the company's products do for the people, adding the "feedback from our fans has been really positive."
