October 31, 2018 / 8:17 PM / 12 days ago

Zynga bookings, forecast miss estimates on poker game slowdown

(Reuters) - Zynga Inc (ZNGA.O) on Wednesday reported third-quarter bookings and current-quarter forecast that missed Wall Street estimates, as the game developer was hit by softness in its “Zynga Poker” franchise and casino slots portfolio.

The Zynga logo is pictured at the company's headquarters in San Francisco, California April 23, 2014. REUTERS/Robert Galbraith/File Photo

The company said it expects fourth-quarter bookings of $250 million, below analysts’ estimates of $269 million, according to Refinitiv data.

“Zynga Poker” was continuing to face challenges from platform changes made by Facebook in the last quarter and adjustments to its in-game purchases.

Facebook Connect bug and login challenges caused some players to not be able to log in and had an impact on the overall business, Chief Executive Officer Frank Gibeau told Reuters.

Zynga, once best known for “Farmville,” has been beefing up its slate of smartphone games ever since users ditched Facebook-based desktop games around 2012 and turned increasingly to mobile devices.

The company also said on Wednesday it was developing mobile-versions of its “Farmville” and “Cityville” games.

Under Gibeau, who became CEO in 2016, San Francisco-based Zynga has tried to revamp itself as a mobile-focused games maker, and has snapped up several smaller game studios including Gram Games and the card and board games studio of Peak Games.

Zynga’s mobile revenue, which accounted for 91 percent of total revenue, rose 9 percent to $212.5 million in the third quarter ended Sept. 30.

The company announced a new licensing agreement on Wednesday with Warner Bros. Interactive Entertainment to develop and publish a new “Harry Potter” mobile game, which is expected to launch in the second half of next year.

A multi-product licensing agreement with HBO will also see Zynga produce two mobile “Game of Thrones” titles, the first of which is expected to launch in the second half of 2019.

Despite continued strength in its legacy games “Words with Friends 2” and “CSR Racing 2”, Zynga posted third-quarter bookings of $248.9 million, narrowly missing estimates of $249.7 million.

Bookings are an important measure of future revenue for companies like Zynga which sell virtual goods such as currency and lives inside the smartphone gaming apps.

The company’s average number of daily active users was 22 million, missing estimates of 24.4 million.

Net income fell to $10.2 million or 1 cent per share, in the third quarter, from $18.1 million, or 2 cents per share, a year earlier.

Reporting by Arjun Panchadar in Bengaluru; Editing by Shounak Dasgupta

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