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Zynga's Profits Continue To Drop

| 7 Nov 2011 22:20
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For the first nine months of 2011, only 4.4 percent of Zynga's users were paying for its games. As a result, it's made huge amounts of cash, but much smaller profits than last year.

It sounds like the casual gaming bubble is officially starting to shrink. Zynga, the company behind everything "Ville", has revealed that it's continuing to make money, but it's still a lot less than last year.

In a new SEC filing, Zynga revealed that the last financial quarter's $306 million in earnings were record-breaking, but net profits were down from last year by almost 54 percent to $12.5 million. Granted, that's still better than the 95 percent profit drop that the company revealed earlier this year, but when you're trying to launch an IPO, it never looks good to reveal that your profits are down.

Meanwhile, Zynga is reporting that of its 152 million unique monthly users, only 6.7 million of them provided its revenue during the first nine months of 2011. That means that only 4.4 percent of Zynga's users are actually paying for the company's games; if I worked there, I'd find that statistic a little terrifying.

The company is also claiming that its third financial quarter will show drastic improvements, thanks to the launches of Adventure World and the new Facebook version of Words With Friends.

Source: Gamasutra

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