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Zynga CEO Talks Mobile Game Developer's Outlook, Coronavirus Disruption

Zynga CEO Talks Mobile Game Developer's Outlook, Coronavirus Disruption

Mobile video game developer Zynga Inc (NASDAQ: ZNGA) reported first-quarter results Wednesday at a time when people have "turned to games like they never had before," CEO Frank Gibeau said on CNBC's "Squawk Alley."

Zyga CEO On The Importance Of Games 

Consumers confined to their homes are able to find refuge from a stressful environment through mobile games, as they allows people to "socially connect," Gibeau said.

This culminated in a "tremendous climb" in gaming activity in April in terms of audience and engagement, he said. 

As shelter-in-place orders are lifted across the world, it is unclear how consumers will react to their gaming activity, and this is in part reflected in Zynga's second-quarter outlook, the CEO said. Nevertheless, some aspects of the guidance are strong, including $460 million in bookings, which was above the consensus estimate. 

Zynga's Advertising Revenue

Video game companies are seeing a decrease in advertising-related revenue, but this is similar across the entire online advertising segment, the CEO said.

What's unique about video games is their "incredible usage" during the quarantine, Gibeau said. 

"For brands or companies that want to reach customers, advertising through games is a very good place to go." 

User pay is still the more dominant revenue stream for Zynga, and will "continue to carry the day" when shelter orders are eased, he said. 

Zynga's Game Production

All of Zynga's employees are working from home "very effectively," and the company's new game pipeline isn't impacted by the COVID-19 pandemic, Gibeau said.

The company has seen "very little" productivity loss, as mobile games require smaller processes and requirements compared to other forms of video games, he said. 

"We can stay in a work from home deployment for as long as is necessary."

Zynga shares were down 4.09% at $7.62 before the close Thursday.

Related Links:

Why In-Game Revenue Is Key For Publishers Like Activision, Electronic Arts

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