Mike Isaac

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With Nearly One Quarter of Its Users Mobile-Only, Zynga Begins the Shift to the Phone

zynga_HQ_retro seatsSo Zynga earnings are out, and they’re better than the Street expected. $1.15 billion beat the estimate of $1.1 for Q4, with a full-year non-GAAP EPS of seven cents per share. Not bad.

But there’s another interesting tidbit that Zynga is sharing for the first time ever: Nearly one quarter of the company’s monthly active users are playing Zynga’s games on mobile devices.

“With 298 million monthly average users, including 72 million on mobile alone (emphasis mine), Zynga already has the largest social gaming audience and remains the best positioned company to lead in building the future of social gaming,” CEO Mark Pincus said in the company’s earnings release.

Those numbers are likely bolstered by the four mobile titles Zynga launched in the quarter — two new ones and two mobile versions of Web products — though we can’t directly attribute it to that, considering it’s the first time Zynga has pushed out any mobile-only MAUs.

But either way, it’s a big moment for Zynga, a company that has risen to prominence on the backs of casual desktop gamers the world around. Just like Facebook, Zynga is facing an industry-wide shift as users migrate from desktop gaming to mobile devices. Problem is, most of Zynga’s blockbuster titles in the past either weren’t suitable for playing on mobile or just weren’t there in the first place.

Not to mention the rising mobile-centric app economy; it’s tough for Zynga to compete with literally thousands of developers producing games strictly for the phone, available on Apple’s App Store, Google Play and now Facebook’s App Center.

And now that Facebook has dampened its reliance on Zynga as the big gaming platform and begun to diversify across multiple gaming studios, Zynga can’t expect the traffic fire hose from Facebook that it once enjoyed.

It’s worth noting that total MAUs are down on a consecutive quarterly basis, from 311 million in the third quarter to 298 this most recent one. So not all is wine and roses in Zynga user land — despite a healthy number of mobile users, it wasn’t enough to offset a quarterly decline in overall users.

Also, I can’t tell you whether that number on mobile is a growing statistic or not, mostly because again, this is the first time the company is breaking these numbers out for us.

Still, it’s promising for a company which has largely been seen as bleeding out over the past year. And what we should really be watching for is Zynga’s “With Friends” network, which it announced at its “Unleashed” event last year. We haven’t heard a bunch more about it since mid last year, but it reads like a giant initiative: An attempt to connect the entire Zynga gaming network across multiple platforms. We’ll see how that goes when it finally arrives.

Oh, and the Street seemed to like today’s news, too; shares of Zynga were trading up five percent at $2.88 during after-hours.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik