According to a report by PopCap Games, in 2011 the number of people in the U.K. and U.S. playing social games at least once a week increased 71% over the year to 118.5 million. The study claims that the number of players transacting in virtual currency increased 86% over the year to 31 million. Facebook remains the dominant platform in social gaming as it is the platform for 91% of casual and avid social gamers playing games. Google+ still has a long way to catch up with Facebook; only 17% of casual social gamers and 23% of avid social gamers play on Google’s platform as well as on Facebook.
Zynga reported third quarter revenues of $306.8 million with earnings of $12.5 million in the quarter. In 2010, the company reported revenues of $279.9 million with earnings of $1.4 million. They ended the quarter with nearly 230 million players using Zynga monthly and a daily count of 54 million users. During the nine months ended September of this year, they had 6.7 million players buying virtual goods compared with 5.1 million players a year ago. Although the numbers have been growing, the figure above still represents a mere 3% of Zynga’s overall user base.
Zynga Introduces New Games
Zynga attributed revenue growth to new game, Adventure World, and the launch of Words on Facebook. After a hiatus on new games, Zynga recently launched 10 new games on the mobile and Facebook’s HTML5 platforms. The gaming industry is waiting for the launch of CastleVille, another social game by Zynga that is scheduled for release in the next few weeks. CastleVille will let players build kingdoms and fulfill quests with the help of friends, and to a background of a professional orchestra music.
Zynga also recently launched Zynga Direct, also known as “Project Z,” a gaming platform that could help them reduce their dependency on Facebook. Project Z will have its own Web site and is an integral part of the company’s “direct-to-consumer” strategy. Players will be able to play games on Project Z without having to go through Facebook. However, Zynga has maintained compatibility with Facebook Connect to let users play multiplayer games and switch between the two gaming Web sites without losing their scores.
The market has been looking forward to Zynga’s IPO. The company filed with the SEC in July of this year but then delayed the IPO because of the weak market. However, things may change as recent reports suggest that the IPO may be released soon after Thanksgiving. Earlier this summer, analysts pegged Zynga’s valuation at $15 billion-$20 billion. In their S1, Zynga has yet to fill in the offer price for the shares.