Social game studio posts overall loss in past year; net revenue rises 12 percent to $1.28 billion.
Zynga today reported fourth-quarter and full-year 2012 financial results, announcing net revenue rose 12 percent to $1.28 billion for the year. However, that did not stop the social game studio from posting a full-year net loss of $209 million.
Revenue for the fourth quarter ended December 31 hit $311 million, with Zynga reporting a net loss of $48.6 million for the period.
Highlights of the company's fourth quarter included daily active users rising from 54 million to 56 million and monthly active users jumping from 240 million to 298 million, representing surges of 3 percent and 24 percent, respectively.
"Our team executed well in the fourth quarter and made important progress in building sustainable new revenue streams and further aligning our company around our best growth opportunities," said Zynga chief operations officer David Ko in a statement.
Looking ahead to Zynga's first quarter of 2013, the company said it expects revenue to be in the range of $255 million to $265 million, with a net loss projected to be in the range of $32 million to $12 million.
Social Media companies are finally taking a dive, and a deep dive at that. Marketshares are at an all-time low, with giant falls. Perhaps, humanity will rise again.
This still worry's me, there is still way too much money invested in social games, mobile games for what kind of return is possible. Hardcore gamers, already know that the gaming market as a whole does not have the demand for 1/8 of all the dollars spent in gaming, going towards social or mobile phone markets. If anything the Wii experiment, should by now, have shown that this stuff was a fad.
The people who play the farmville, Zynga games (children and grandmas) will simply not spend a whole lot of money on them when they can get what they want out of those games for free. Apple dominates the mobile phone and the most popular android games will follow the pricing structure apple has created. While there is money to be made, at price structures from .99-9.99 the mobile phone market will not overtake console/pc gaming anytime soon.
What I feel the great social mobile game market is - It is the great chase for profit with out any work. Let me explain. Every short term, high profit/high risk invester chases after that quick return, high return, without actually having to get down into the trenches. And this is culture that has risen up with the children of Gen X ers, who believe movies like Trading Places, Risky Business, and Wallstreet are more fact then fiction. Who believe that every dollar spent on lottery tickets is that much closer to being millionaires, the belief that if I jump on board soon enough I can be the next Facebook, but without all that work or knowledge that it requires.
People look over at the mobile game market in mid-2000 and see some wildly creative, wildly successful, and hard working developers make a killing off a niche market that took talent, hard work, and perfect timing. So they throw their money, their parents money, your money, and other peoples money at the market without any idea, any clue of what it takes to make a 'game' that others want to play. You have bean counters and CEO's of publishers pushing development towards the chase of low investment, high return, quick cash world of social/mobile gaming with the almost religious belief that they too will make a fortune just like some other guy they saw. Mean while developers who have been in this business for years, who have made great games and bombs, have sat back cautiously, knowing it will take alot more then just money and belief to obtain success.
As for the rest of us - gamers, who find angry birds more of a fun distraction than a 50-60 dollar investment. Who goofed off with the Wii for a whole hour before getting out of breathe and letting the dust gather, who love minecraft but sure as hell are not building gaming pc toward its specs. who have spent about as much on phone games, all together, as they have on one single console game- we already know social/mobile games have a niche but it is a small one. Fads like motion controls, Zynga games, poco games have really thrown off the momentum of this generation of games, I hope that the next gen will start to see alot more focus on real gaming: storylines, mechanics, controls, and compelling content (not angry birds in space) that will advance our hobby and main choice of entertainment.
I know little about business, but it seems like if you've lost millions while revenue, users, and active users have all gone up significantly something is terribly wrong.
how the hell can they make such cheap garbage games and manage to make a loss? even with a rising revenue over 1 billion? the contributors at newgrounds and armor games make better games in their spare time for free.
Take-Two posts great numbers and Zynga posts a loss, this is economical justice if such a thing existed, which it doesn't, because economics are not about being worthy or "good", but merely about getting enough money from customers to keep running.
As it turns out, finding the most easily distracted people in the world and then trying to hold their attention for several years isn't a very sound business plan.
That is a huge loss by anybody's measure.
It's interesting to see how quickly these fly by night games rise and fall so rapidly, such is the fickle and unpredictable nature of the casual gaming market.
I predict panic meetings and a lot of sweating at Zynga HQ right about now - you can't take your eye off the ball for a second in this market - if your finger isn't on the pulse, it will be a quick death I'm afraid.
Make something worthy time to leave One click Copy paste Games IN past, Or loose all your money and DIE!!!!!
Suck it Zynga you rise fast but now its time to fall!
People finally see the little one click energy games are not games and they aren't fun!
I hate u so much Zynga!
Edit: How do I get it to display the image? It's very much SFW, by the way.
This is glorious news indeed, but it saddens me that they had $209 million to lose in the first place.
Revenues are up. Earnings are down. Their lackluster has more to do with poor financial decisions than sales. I'm guessing that they invested a bunch of money to develop games that aren't performing too well, and that they're still making quite a bit of money off a handful of their 'cash cow' games
The bubble has popped and I hope it takes down every last one of these IAP whoring wait simulators developers.
I know its easy to feed off of the stupid people and I laugh at them for wasting their money and I would love to see them poor on the street from it but they far out number the logical people apparently so now every game on the app store is these 'free' to play BS. They totally pushed out the quality 'pay for the full version' type games so I just want them to go away...NOW!
"I don't fucking want innovation. You're not smarter than your competitor. Just copy what they do and do it until you get their numbers."
Mark Pincus, Zynga CEO.
I hate their products no doubt, but if they fail, I hate to see what will become of the countless employees, especially in this economy.
Seems the rise of the social "game" has flattened out. The only thing that could of made me more pleased is if they claimed bankruptcy.
@Savior4Life Fuckin' A. These guys have made a fortune on what barely constitute as games for way too long.
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