Zynga Wants to Know If Fans Will Pay to Play Its Games
Streaming as a distribution technology is going to be here and it’s going to be big, whether it’s subscription or free-to-play.
(Bloomberg) -- Zynga Inc., the pioneer in free-to-play mobile games, is considering offering monthly subscriptions to popular titles such as Words With Friends as a way to boost revenue.
Chief Executive Officer Frank Gibeau said Wednesday in an interview that customers who sign up would get extra content. He also sees a role for Zynga titles in the online gaming platforms being rolled out by companies such as Google and Apple Inc.
“Streaming as a distribution technology is going to be here and it’s going to be big, whether it’s subscription or free-to-play,” he said.
Zynga, based in San Francisco, reported first-quarter sales grew to $265.4 million, ahead of Wall Street projections of $242.4 million. Adjusted earnings before interest, taxes, deprecation and amortization totaled $75.5 million and also beat analysts’ estimates.
Shares of Zynga rose as much as 11 percent to $6.13 in extended trading. The stock was up 40 percent this year through Wednesday’s close.
The company lifted its full-year revenue guidance by $50 million to $1.2 billion due to the strength of recently acquired games such as Empires & Puzzles and Merge Dragons!, Gibeau said.
Zynga expects second-quarter sales of $280 million, above Wall Street forecasts, and adjusted Ebitda of $62 million, compared with analysts’ estimates of $56.4 million.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
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