Apple Inc launched its privacy update in April, making it hard for third-play apps to track iPhone users without their consent and leading to warnings from several social media firms, including Meta Platforms Inc and Snap Inc.
“Companies that rely on in-game advertising for most of their revenue are more exposed to the risk of Apple’s privacy changes,” said Piers Harding-Rolls, head of games research at Ampere Analysis.
“One area that continues to impact all mobile games companies is user acquisition,” he added.
The “Empires & Puzzles” owner, during its second-quarter earnings call, had warned that pressure on ad revenue and bookings would be more pronounced in the third quarter, given the adoption of Apple’s privacy changes.
Roughly 85% of iOS users updated to the recent version of the operating system as of July, data from analytics firm Newzoo shows. However, opt-in rate for users to allow tracking was relatively low, according to app monetization specialist Fyber.
The uncertainties looming over the iOS platform could spark a wave of consolidation among mobile gaming companies, analysts said.
“This kind of M&A activity will continue throughout the rest of 2021 and into 2022 as advertisers explore new ways to monetize in-game ads on iOS”, analytics firm GlobalData’s gaming analyst Rupantar Guha said.
Markets with highest mobile game revenues https://graphics.reuters.com/ZYNGA-RESULTS/akvezmqdzpr/chart_eikon.jpg
For interactive graphic, click here: https://tmsnrt.rs/2ZVqoUV
* Zynga has spent billions of dollars on acquiring mobile game developers Peak, Rollic and Echtra Games to beef up its game roster. It also bought mobile game ad network Chartboost to bring advertising in-house.
* Analysts estimate ZNGA’s third-quarter net bookings to grow 6.05% to $666 million when it reports on Monday, the slowest in 13 quarters.
* Earnings per share is estimated at 7 cents.
WALL STREET SENTIMENT
* Average analyst rating on stock is “buy”, with 18 “strong buy” or “buy”, no “hold” and 1 “sell”.
* Median price target is $11 versus the current price of $6.90.
Net Bookings slowing down for Zynga as restrictions ease https://graphics.reuters.com/ZYNGA-RESULTS/xmpjorkzqvr/chart.png
For interactive graphic, click here: https://tmsnrt.rs/3CR1vYC
QUARTER ENDING REFINITIV IBES ACTUAL RESULTS
Jun. 30 2021 0.09 0.04 Missed
Mar. 31 2021 0.09 0.08 Missed
Dec. 31 2020 0.09 0.09 Met
Sep. 30 2020 0.09 0.10 Beat
Jun. 30 2020 0.08 0.10 Beat
Mar. 31 2020 0.06 0.06 Met
Dec. 31 2019 0.06 0.08 Beat
Sep. 30 2019 0.05 0.05 Met
(Reporting by Tiyashi Datta in Bengaluru, Writing by Subrat Patnaik; Editing by Sweta Singh and Sriraj Kalluvila)