Zynga Inc (NASDAQ:ZNGA) reported encouraging results for its 2Q2016 as revenue exceeded internal expectations and the bottom-line came to breakeven. But the company’s report on declining active users left a sour test in the mouths of many investors.
As Zynga Inc (NASDAQ:ZNGA) battles with shrinking monthly active players, SPYR Inc (OTCMKTS:SPYR) is worrying about the smooth rollout of its newest game titled Drone Wars. The company currently has a team drawn from its development and publishing division doing some presentations in Europe. SPYR’s team will showcase at three industry conferences in Cologne, Germany from August 15 to August 21.
SPYR is hoping that its presentations in Europe will increase its visibility in the global electronic games platform.
How Zynga fared in 2Q
Zynga Inc (NASDAQ:ZNGA)’s earnings numbers in 2Q were clouded by weak user metrics.
Zynga reported revenue of $181.74 million in 2Q2016, outpacing internal guidance that called for revenue of $180 million. However, the average estimate of analysts called for revenue of $182.97 million. Nevertheless, Zynga still delivered a successful quarter.
The quarter was supported by strong performance of titles such as Words With Friends and Zynga Poker. Zynga reported that Poker contributed 19% of its online game revenue.
But the 26% decline in monthly active users clouded Zynga Inc (NASDAQ:ZNGA)’s otherwise encouraging performance in the quarter. The company said that its mobile active users fell 23%. With that, the company’s management admitted that while they are making progress, there are areas that still require more input. One of them is increasing the number of active users.
What about the future?
Some other thing that Zynga Inc (NASDAQ:ZNGA) is pursuing is the opportunity in augmented reality game space. The success of Nintendo’s Pokemon Go, whose global sales have hit $160 million, is inspiring game developers like Zynga to consider leveraging AR technology in their future products. But for the time being, growing user numbers remains an immediate headache for the company.
