In case you’re questioning why Zynga issued $875 million in convertible notes on the finish of 2020, CEO Frank Gibeau stated the corporate was fundraising to construct up a “conflict chest” for extra acquisitions.
“As you understand, we’ve been a consolidator inside this enterprise for some time, and we’re going to proceed to be on offense [looking for] nice corporations, nice cultures, nice groups that we will deliver into Zynga,” Gibeau advised me.
Within the final yr alone, Zynga acquired two sport studios based mostly in Istanbul — Peak Games for $1.8 billion and Rollic for $180 million (within the latter case, it solely acquired 80% of the corporate initially).
“There are actually 4 or 5 examples of us having achieved this efficiently,” Gibeau stated. “After we began, no person was choosing up our cellphone calls. Now once we name, we’re a little bit of a vacation spot of alternative for lots of builders on the market.”
Gibeau and I have been talking about Zynga’s fourth quarter earnings, during which the corporate reported all-time excessive income of $616 million and a internet lack of $53 million (although one other measure of profitability, adjusted EBITDA, was truly optimistic at $90 million). Each day energetic customers have been up 77% yr over yr, to 36 million, whereas month-to-month energetic customers have been up 103%, to 134 million.
Trying forward, Zynga is forecasting income of $2.6 billion (a 32% year-over-year improve) and adjusted EBITDA of $450 million for 2021. And whereas one other acquisition may considerably develop the enterprise, Gibeau famous that the corporate’s forecasts have “no acquisitions assumed,” including, “We’re in an awesome place, as a result of we would favor to do acquisitions in 2021, however we don’t need to do any offers.”
There are new video games lined up for 2021, together with Puzzle Fight, Farmville 3 and a Star Wars title. The corporate additionally plans to proceed growing hypercasual video games, to develop extra cross-platform video games, to increase internationally and to proceed constructing out its advert community — in actual fact, he recommended that Apple’s upcoming privacy changes could possibly be good for Zynga.
“Plenty of conventional advertising and marketing companies aren’t going to have the ability to survive very effectively,” he stated. “As a result of we’re a first-party knowledge firm — all the information we generate is coming to our companies from our video games — and since we’re at scale … IDFA is a chance for our firm.”