Image via CrunchBase
Zynga, the top maker of Facebook games, revealed a 90-percent plummet in profit
in the June quarter on Wednesday that raised fresh questions about whether the
company can sustain its growth ahead of its much-anticipated
IPO.
The company behind Cityville and Farmville, which filed for an initial public
offering on July 1 worth up to $1 billion, said its net income dived to $1.3
million from $13.91 million a year earlier. Its profit also fell more than 90
percent sequentially, from $16.7 million in the three months ended
March.
The company did not release a major new Facebook game until “Empires and
Allies” on May 31, which could account for some of the profit drop. The company
also spent money on acquisitions and its international push in the
period.
Zynga has been increasingly challenged by other video game companies, which
are starting to attack its Facebook bastion. Electronic Arts, which competes
with Zynga on Facebook, has seen its recently launched “The Sims Social” gain
more than 50 million monthly active users, passing some of Zynga’s games in
about five weeks.
Zynga declined to comment on its finances. But in a regulatory filing, it
said the company’s total costs and expenses rose $5 million from a year earlier
and by $9 million from the previous quarter, according to the filing.
Related articles
- As competition heats up on Facebook, Zynga announces Mafia 2 social game (venturebeat.com)
- Sims Social Overtakes FarmVille on Facebook, But Remains Behind CityVille (shoppingblog.com)
