If you’re questioning why Zynga issued $875 million in convertible notes on the finish of 2020, CEO Frank Gibeau stated the corporate was fundraising to construct up a “struggle chest” for extra acquisitions.
“As you realize, we’ve been a consolidator within this enterprise for some time, and we’re going to proceed to be on offense [looking for] nice corporations, nice cultures, nice groups that we are able to convey into Zynga,” Gibeau instructed me.
In the final yr alone, Zynga acquired two sport studios based mostly in Istanbul — Peak Games for $1.eight billion and Rollic for $180 million (within the latter case, it solely acquired 80% of the corporate initially).
“There at the moment are 4 or 5 examples of us having executed this efficiently,” Gibeau stated. “When we began, no person was selecting up our telephone calls. Now after we name, we’re a little bit of a vacation spot of alternative for lots of builders on the market.”
Goodbye Flash, goodbye FarmVille
Gibeau and I had been talking about Zynga’s fourth quarter earnings, wherein the corporate reported all-time excessive income of $616 million and a internet lack of $53 million (although one other measure of profitability, adjusted EBITDA, was truly constructive at $90 million). Daily energetic customers had been up 77% yr over yr, to 36 million, whereas month-to-month energetic customers had been up 103%, to 134 million.
Looking forward, Zynga is forecasting income of $2.6 billion (a 32% year-over-year enhance) and adjusted EBITDA of $450 million for 2021. And whereas one other acquisition may considerably develop the enterprise, Gibeau famous that the corporate’s forecasts have “no acquisitions assumed,” including, “We’re in an important place, as a result of we would favor to do acquisitions in 2021, however we don’t need to do any offers.”
There are new video games lined up for 2021, together with Puzzle Combat, Farmville three and a Star Wars title. The firm additionally plans to proceed creating hypercasual video games, to develop extra cross-platform video games, to increase internationally and to proceed constructing out its advert community — in actual fact, he prompt that Apple’s upcoming privateness adjustments might be good for Zynga.
“A number of conventional advertising companies should not going to have the ability to survive very effectively,” he stated. “Because we’re a first-party information firm — all the info we generate is coming to our companies from our video games — and since we’re at scale … IDFA is a chance for our firm.”
Zynga completes its acquisition of hyper-casual sport maker Rollic