(Reuters) - Zynga Inc (ZNGA.O) raised its full-year forecast on Wednesday after topping analysts’ estimates for quarterly bookings, as users spent more time playing games like “Empires & Puzzles” while sheltering at home amid the COVID-19 pandemic.
The mobile game developer raised its full-year bookings forecast to $1.8 billion from $1.75 billion, above analysts’ average estimate of $1.76 billion, according to IBES data from Refinitiv.
Bookings indicate future revenue including sales of virtual goods, such as currency and lives, within the games.
Mobile game spending and downloads have surged in the past two months as measures to limit the spread of the novel coronavirus forced millions to stay indoors.
Global mobile gaming spend jumped 26% to over $6.3 billion in April from a year ago, on a preliminary estimated basis, according to data from analytics firm Sensor Tower.
“We are experiencing elevated levels of engagement in our live services portfolio as people continue to shelter-in-place”, Zynga said adding that it expects these trends to normalize as shelter-in-place rules begin to be lifted.
“We felt that it was prudent to assume that”, Chief Executive Officer Frank Gibeau told Reuters.
As the shelter-in-place starts to lift people would start to go back to work or other things and that’s why we assumed it in the second half of the current quarter, he said.
Zynga, which also makes money through advertisements on its free-to-play games, said user pay bookings rose 24% to $366 million from a earlier year, partially offsetting a 9% decline in ad sales.
“The drop in our ad business was much less than some of the other networks out there because we weren’t as vulnerable to big brands, pulling back their advertising dollars”, Gibeau added.
The “FarmVille”-maker has been strengthening its hold on the fast-growing mobile gaming market through a slew of acquisitions and licensing agreements with media outlets to publish themed games of popular franchises
The company reported bookings of $425 million, for the first quarter ended March 31, beating average analysts’ estimate of $405.7 million.
Total quarterly revenue rose 52% to $403.8 million, falling short of analysts’ expectation of $406.7 million.
The company reported a smaller quarterly net loss of $103.9 million, or 11 cents per share, from $128.8 million, or 14 cents per share, a year earlier.
Reporting by Ayanti Bera in Bengaluru; Editing by Shailesh Kuber