Zynga CEO sees fast growth, even with Covid-fueled gains gading
For video-game makers, the Covid-19 party is largely over, though growth will continue apace for the industry, according to Frank Gibeau, chief executive officer of the company behind popular mobile-phone titles like Words with Friends.
While Zynga Inc. saw a huge boost in new and returning users from March to June, game-playing metrics like daily active users are returning to normal as consumers begin to leave their homes, Gibeau said in an editorial board meeting Wednesday with Bloomberg News.
“March to late June was a unique period of time,” he said, adding those “days are probably over.” Yet even with kids also starting school, the industry will still maintain its strong double-digit growth, he said. Last quarter, the company's adjusted revenue increased 38%.
Zynga, which recently increased its guidance for the year, will continue to grow by pursuing acquisitions and by trying out new platforms. Since Gibeau, 51, took over in 2016 and worked to right the company's fortunes, the shares have more than quadrupled. Its market value is nearing $10 billion.
“Now we are thinking, What's the next ascent, how do we get to $20 (billion)?” he said.
The company has announced two deals since June, including Zynga's biggest ever: the $1.8 billion takeover of Turkish mobile-game maker Peak. It also acquired Turkey's Rollic Games, which expands the company's male, international demographics. The majority of Zynga's gamers today are women between the ages 24 of 40.
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“The availability of capital is high, we are considering all our options there,” Gibeau said. In the past, the company issued bonds to finance deals, and sold its San Francisco headquarters in a lease-back arrangement.
Zynga is also trying out new platforms for games -- even experimenting with making console games, the domain of companies like Electronic Arts Inc., where Gibeau spent more than 20 years. Zynga has already announced games for Amazon.com Inc.'s Alexa and for Snapchat.
“We are experimenting in different places here, looking at PCs and consoles as another idea,” Gibeau said. “I don't see it as an insurmountable hill.”
By Olga Kharif
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