King Digital beating Zynga in mobile game wars
The fickleness of the mobile games industry was on full display in the earnings reports of creator Zynga and maker King Digital Entertainment.
Zynga's shares fell 10 per cent while King Digital's soared 18 per cent in extended trading on Thursday after the companies reported contrasting fortunes in a key industry metric.
King's total gross bookings, an indicator of future revenue, increased 8 per cent to US$586 million in the fourth quarter, about US$45 million more than the average analyst forecast.
Zynga reported bookings of US$182.4 million, about US$19 million less than expected, according to research firm StreetAccount.
The company, whose market value hit more than US$14 billion in 2012, lost most of its shine after failing to come up with new games to match the popularity of .
It was also caught off guard by mobile-focused rivals such as Dublin-based King Digital and Supercell, the maker of and is now valued at about US$2.4 billion. King, which went public last March, has a market value of about US$4.6 billion.
Zynga said on Thursday it would launch six to 10 new mobile titles this year as it tries to reverse its fortunes.
"We will deliver a 100 per cent mobile-first new product slate featuring new games, with a goal of ending 2015 with more than 75 per cent of our fourth quarter bookings coming from mobile," chief executive Don Mattrick said.
King, which already gets 78 per cent of its gross bookings from mobile, launched a portfolio of hit new games last year, including the popular as well as a new version of its smash hit .
That helped it to avoid the fate of Zynga and developer Rovio Corp, which is also struggling to grow.
King Digital's revenue and profit easily trumped market estimates as its newer games more than made up for the declining popularity of older titles.
Zynga's main launch, the multi-player word game , failed to excite gamers and launches aimed at the Chinese market failed to live up to expectations.
The company said it would close its Beijing office and lay off all 71 employees.
Zynga's forecast for bookings in the current quarter also fell far short of estimates, according to StreetAccount.
