Online gambling elements continue to deliver for Zynga

San Francisco-based social gaming developer and operator Zynga’s latest quarterly (Q2-2016) shows that the company continues to incur losses, albeit at a slower rate than before…but that online gambling-related games like Zynga poker and Wizard of Odds and Hit It Rich slots are still delivering impressive percentages of the company’s revenue at 19, 15 and 11 percent respectively.

The slot products were especially impressive, contributing 32 percent of all game revenue and 39 percent of in-game sales revenue, whilst the poker vertical accounted for 19 percent of game revenue and 20 percent of in-game sales.

That wasn’t enough to stave off overall net losses in the quarter, although they were markedly curtailed at $4.4 million (Q2-2015: $26 million) on revenue which declined 9 percent to $181.7 million following a tightening of management controls and especially marketing budget.

The split between online gaming revenue and advertising and other sources was $136 million vs. $46 million.

The mobile channel again recorded an increase in in-game sales contribution, rising 19 percent year-on-year to $137 million of the total $174.6 million generated.

Investors will be concerned not just by the continued losses, but by the steady decline of the player-base despite the advent of new games like the CSR2 racing product.

During Q2-2016 daily active users fell 15 percent year-on-year, and monthly active users declined more than 25 percent, although the company managed to boost its average daily takings per DAU to 10.7 percent – a y-o-y increase of 17 percent.

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