Zynga Expects Bulk of Revenue from Licensed Titles in 2020
While Zynga has “soft” launched a “Game of Thrones” (GoT) social slot machine mobile game in Mexico and Thailand, new licensed titles aren’t expected to be “major contributor” to revenue until 2020, company executives told analysts in releasing Q1 earnings.
GoT, which became available for download in April, is the first of a trio of properties (with Star Wars and Harry Potter) for which Zynga signed licenses last fall. The Harry Potter title is expected to be available this fall.
The big licenses were a major departure for Zynga, which previously largely developed its own IP. The lone exception has been the company’s CSR Racing game which includes auto brands such as Mercedes Benz and Alpha Romeo and was acquired as part of Zynga’s acquisition of game developer NaturalMotion in 2014.
The release in April of GoT’s final season on HBO “was an opportunity for us and will create marketing platforms, new channels and new ways to market the games that you don’t traditionally find with some other go-to market strategies on the games” that Zynga owns, said CEO Frank Gibeau. With the three licensed games “our goal is to maximize their fandom and their audiences” and “build new forever franchises.”
Zynga registered a $128.8 million net loss in Q1 ended March 31, compared to a $6 million profit a year earlier, due largely to the recently acquired Empire and Puzzles and MergeDragons! mobile games. Revenue from the two titles exceeded projections, adding $86 million in additional payments to the price of the 2018 acquisitions of Small Giant Games and Gram Games. Revenue rose 35% to $265 million.
Zynga, Gerard Griffen, CFO, 855-449-9642