Social gamemaker Zynga’s trouble with adapting to the mobile market continues as it reported a huge loss in the fourth quarter with the fiscal results showing a loss of $226m.
However, its Q4 revenue was up 9 per cent year-over-year at $193 million, but analysts were looking for $201.11. In view of this loss, the company has lowered its forecast results for the ongoing first quarter below street estimates. Shares of the company declined 14 percent in extended trades.
The company known for its social games, has been posting consecutive losses alongside a withering user base. The company generates most of its revenues from the virtual-goods purchases made by its online gamers and through ads. But the tide has now turned against it, as gamers spend more time on tablets and smartphones.
Despite the results, CEO Don Mattrick described 2014 as “a year of progress for Zynga”.
Zynga also announced the closure of its China studio, resulting in job losses for all 71 employees at the Beijing branch. However, the closure will result in annualised cost savings of $7m.
Going into 2015, the company will focus on three priorities: driving mobile growth, launching more products in more categories and building on its social legacy. By the end of 2015, Don wants Zynga to have 75 percent of its fourth quarter bookings coming from mobile. The company still has a sizeable war chest with $1.1 billion in cash.
Don also revealed that Zynga expects to launch up to 10 new games, including the firm’s first entries into the match-three and action strategy categories. New titles include match-three title FarmVille: Harvest Swap, strategy game Empire & Allies and NaturalMotion‘s new title Dawn of Titans.