May 2 (Reuters) - Game developer Zynga Inc beat Wall Street estimates for first-quarter bookings as more users committed themselves to spending money on its mobile games such as “Words With Friends 2” and “Zynga Poker”.
First-quarter bookings for the Farmville maker rose 6 percent to $219.5 million, well above the $213.1 million estimated by data and analytics firm FactSet.
Zynga, which makes money by selling virtual goods to gamers, is now valued at $3 billion, a far cry from its peak valuation of over $10 billion a few years ago.
The fortunes of the company, which was founded by Mark Pincus and went public in 2011, reversed a year later when gamers started moving away from Facebook-based desktop games to those played on mobile devices.
Over the years, Zynga has restructured itself, laid off employees and changed its CEOs several times, narrowing its focus to mobile-centric games.
The strategy seems to be paying off as mobile revenue, which accounts for 88 percent of its total revenue, rose 13 percent to $182.6 million.
Quarterly mobile revenue from its “Words With Friends” franchise increased 18 percent, while mobile revenue from “Zynga Poker” rose 13 percent.
Chief Executive Officer Frank Gibeau, who once managed Electronic Art’s mobile games division and took the helm in March 2016, said the company will spend more to increase player engagements through live services in its games.
“We are growing the audiences... one of the things about mobile, because there’s something like a billion and a half smart devices that can play games, it’s very hard to get market saturation,” Gibeau told Reuters.
Zynga on Wednesday said its founder Mark Pincus would convert all of his high voting shares into Class A common stock, reducing his voting rights to about 10 percent from 70 percent.
Pincus will continue to serve on Zynga’s board as non-executive chairman, effective immediately.
Zynga’s average mobile daily active users rose 24 percent to 23 million, its highest in over four years.
The company however, forecast current-quarter bookings of $218 million, below the average analyst estimate of $220.9 million, according to FactSet.
Zynga reported a net income of $5.6 million, or 1 cent per share, in the quarter ended March 31, compared with a loss of $9.5 million, or 1 cent per share, a year earlier.
It also announced a new $200 million share repurchase program. (Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur)