How Does Zynga’s Mobile Platform Gaming Revenue Compare To Its Peers?

June 28th, 2019 by Trefis Team
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Zynga (NASDAQ:ZNGA) generates its revenues from sales of games on mobile, web, and other platforms. Mobile platform sales makes up for close to 90% of the company’s total revenues, and it will likely grow in the high teens from $907 million in 2018 to $1.47 billion in 2021, led by its new games and the impact of recent acquisitions. While Zynga’s mobile platform gaming growth will likely be higher than that of Activision Blizzard, it could be slightly below Electronic Arts’. In this analysis, we compare Zynga’s growth in mobile platform vis-à-vis its primary competitors and provide an outlook of the future course of business. You can view our interactive dashboard analysis ~ How Does Zynga’s Mobile Platform Gaming Revenue Compare To Its Peers? ~ for more details. In addition, you can see more of our Information Technology data here.

Zynga’s Mobile Platform Revenues Have Grown At A Faster Pace Than Its Peers

  • Average Annual Growth:
    • Activision Blizzard: 14.4%
    • Zynga: 19.5%
    • Electronic Arts: 10.8%
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Zynga’s Share In Mobile Platform Gaming Has Increased In Recent Years, And This Trend Could Continue

  • Combined mobile platform revenues for Activision Blizzard, Zynga, and Electronic Arts grew at an average annual rate of 15.0% from $2.79 billion in 2016 to $3.66 billion in 2018.
  • Zynga’s share has grown from around 20% in 2016 to 22% in 2018, as it saw growth in mobile platform revenue at a higher pace when compared to growth for the overall combined market during the same period.
  • Looking forward, this trend could continue with Zynga’s share increasing to 25%, as it is expected to continue to grow at a faster pace, when compared to the overall market.

New Games, Recent Acquisitions Will Aid Zynga’s Online Games And Advertising Growth For the Mobile Platform

  • Online Games refers to sales of all of Zynga’s games, and accounts for over 70% of total mobile platform revenues. Online Games revenue grew from $414 million in 2016 to $590 million in 2018, and they could continue to see strong growth to $973 million in 2021.
  • This growth will primarily be led by the company’s new portfolio acquired from Gram Games, and Small Giant Games. Popular Games from recent acquisitions ~ Merge Dragons!, Empires & Puzzles. Also, continued demand for Zynga’s key franchises including Poker, FarmVille, and CSR could aid the overall growth.
  • The company also expects to launch new games from popular franchises, including, Game of Thrones, Harry Potter, and Star Wars, which should aid revenue growth.
  • Advertising revenues could also grow from $225 million in 2018 to $353 million in 2019, as the company sees higher user engagement for its online games.

Unlike Its Peers, Zynga Derives Most of Its Revenues From the Mobile Platform

  • Zynga’s mobile platform revenues accounted for 77% of the company’s total revenues in 2016.
  • The figure increased to 90% in 2018, and we expect it to hover around 90% over the next few years.
  • This compares with around 30% contribution from mobile platform for Activision Blizzard, and 17% for that of Electronic Arts, given both these companies primarily target console platform gaming.

 

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