By Gerry Shih
SAN FRANCISCO, April 24 Zynga Inc said
on Wednesday the number of people playing its online games
dropped dramatically in the first quarter, a development that
overshadowed better-than-expected revenues and sent its stock
tumbling in after-hours trade.
Shares fell 10 percent to $2.99 in extended trading.
The San Francisco-based publisher behind games like
"FarmVille" and "Words With Friends" said its number of monthly
players continued its decline to 253 million, the lowest figure
since the number peaked at 331 million at the end of the third
quarter of 2012.
On an adjusted basis, Zynga reported earnings of 1 cent per
share, beating analyst expectations of a loss of 4 cents per
share. But the company also projected that its second-quarter
loss would be between 3 to 5 cents per share, exceeding the 1
cent per share loss analysts had expected.
"The second quarter guidance is light," said Sterne Agee
analyst Arvind Bhatia. "We continue to think that any hope for
real growth for this nebulous company really depends on what it
can do in real-money gaming."
Zynga has struggled to keep users, who once flocked to its
games on Facebook Inc's website. In recent months, Zynga
and Facebook have revised their business partnership, as Zynga
has sought to establish itself as a more independent gaming
network at the risk of receiving less visitor traffic from
Zynga has promised investors that it could tap into a
potentially lucrative new revenue stream by launching real-money
casino games around the world.
The company reported revenues of $263.6 million, down 18
percent from the year-ago quarter but above Wall Street's
depressed expectations as the online game maker wrung more sales
htan expected out of its shrinking user base.
Zynga's quarterly bookings of $229.8 million also topped
estimates but represented a 30 percent decline from a year ago.