Zynga: One click closer to IPO?
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Zynga Inc., the social gaming company that has some investors chomping at the bit for its initial public offering, on Thursday took one small step closer to its IPO, stating that it plans to sell its shares on the Nasdaq under the ticker symbol ZNGA.
The disclosure came in the company’s fourth revision to its initial IPO papers, filed in July with the Securities and Exchange Commission.
In addition, there were a couple of zingers in the new filings, including hints that Zynga’s players may be giving up on its games more quickly. SiliconBeat’s Chris O’Brien reported that Zynga has shortened the time it amortized sales of some virtual goods to 15 months, down from earlier estimates of 19 months. O’Brien said the figures suggest ‘people are playing the games for shorter periods of time.’
The amendment comes on the heels of another disclosure: Zynga’s net income in the quarter ended June 30 fell 90% as its costs ramped up to support the launch of new games such as Empires & Allies and a barrage of titles announced at a splashy event this week at the San Francisco company’s headquarters.
On the other hand, the documents also contained some good news for Zynga. FarmVille, launched in June 2009 and one of Zynga’s oldest games, continues to harvest cash. Although more than half of its players have deserted the game since it peaked last year at 83.8 million monthly users, the remaining 35 million FarmVille players continue to shell out money to plow virtual crops.
In the first six months of 2011, Zynga said it saw a 122% leap in virtual goods sales, to $493.9 million, a good chunk of that from FarmVille, according to the filing:
Online game revenue increased $271.5 million from the six months ended June 30, 2010 to the six months ended June 30, 2011. FarmVille, FrontierVille and CityVille accounted for $76.6 million, $70.5 million and $46.6 million of the increase, respectively.
Zynga remains mum on when it expects to pull the trigger on selling its shares, but analysts predict that the company will hold off until the current market turmoil settles and investors feel more confident in shelling over real cash for a virtual goods business.
-- Alex Pham