Zynga forecasts bookings largely below estimates; shares slump - Metro US

Zynga forecasts bookings largely below estimates; shares slump

By Anya George Tharakan

By Anya George Tharakan

(Reuters) – “FarmVille” creator Zynga Inc forecast current-quarter bookings largely below estimates, sending its shares down as much as 12 percent in extended trading on Thursday.

The company forecast third-quarter bookings in the range of $180 million-$190 million, largely below the average analyst estimate of $188 million expected 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 is expected to include impact of the long-delayed mobile racing game “CSR 2”, which the company launched at the end of the second quarter.

Zynga is on track to launch 10 games this year, with the second half of the year featuring titles such as “FarmVille: Tropic Escape”, as well as another delayed action-strategy game, “Dawn of Titans”.

Zynga, whose “FarmVille” once dominated games played on Facebook Inc , named Electronic Arts Inc veteran Frank Gibeau as chief executive in March to spearhead its transition to a mobile-focused games maker.

Gibeau – who replaced founder Mark Pincus – has a track record of managing EA’s mobile franchises such as “Plants vs. Zombies” and getting games shipped on time.

Zynga’s average daily active users fell 14.3 percent to 18 million from a year earlier, while daily users on mobile fell to 15 million.

Most of the decline was driven by some of the legacy mobile games, Gibeau told Reuters.

“We still have got a lot a work to do. We are not declaring victory or getting too ahead of ourselves here,” he added.

Zynga, however, reported higher-than-expected bookings in the second quarter, driven by higher demand for its slot games and social games such as “Words with Friends” and “Zynga Poker”.

The company said bookings were $175 million in the three months ended June 30. Analysts on average had expected $171.3 million, according to FactSet StreetAccount.

The company during the quarter launched games such as “Spin It Rich! Slots”, “Ice Age: Arctic Blast” and “Wizard of Oz: Magic Match”.

Gibeau said the launch of Pokemon GO had no positive or negative impact, but added it has brought new people into mobile gaming.

Pokemon GO, which released in the United States on July 6, has become a global phenomenon, sending players into city streets, offices, parks and restaurants to search for colorful animated characters.

Gibeau said the company was also working on some projects in augmented reality, virtual reality and wearables.

The company’s net loss narrowed to $4.45 million from $26.87 million a year earlier.

Separately, the company appointed Matt Bromberg as chief operating officer, with whom Gibeau has worked with in the past.

Up to Thursday’s close of $2.97, shares had risen 11 percent this year.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila)

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