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Zynga banking on a new winner as game players and dollars disappear

Jenna Wortham (via AFR) | April 25, 2013
The company hopes that a new game,which will be released on Wednesday, will help it regain some of the footing in the gaming industry

FACING MOBILE UPSTARTS

For the new game, Zynga added new drawing tools and accessories as well as features that make Draw Something 2 more closely resemble a social network, with buttons to allow them to share their creation on Facebook, Twitter and Instagram. In addition, users can find and follow other people who are playing the game, browse their shared drawings and "like" and comment on them.

Zynga has also enlisted celebrities on this version of the game, including the pop performers Will.i.am and Carly Rae Jespen, so that their fans can see their drawings through the application as well.

"We want to reactivate people who played and loved Draw Something 1 but lapsed," Travis Boatman, a senior vice president of mobile at Zynga, said in an interview at the company's New York headquarters.

Zynga is going all out for the release of the new game, with a partnership with Universal Pictures around the coming animated film "Despicable Me 2" to show related advertisements in the game as well as base drawing challenges around the movie.

Caitlin Turosky, a marketing manager at Zynga, said advertising deals like that one had great potential. Zynga currently makes money by showing ads in the free versions of its games, by selling premium versions of its games and by allowing players to make in-app purchases. But eventually, Ms. Turosky said, the company could even show players advertisements based around the topics and objects they are sketching.

REAL CASH IN GAMES

Zynga is also experimenting with games using real money , but those efforts are largely located in the United Kingdom.

In the company's earnings report, it said it earned just a penny a share, or $US263.6 million in revenue. During the same quarter of last year, the company reported revenue of $US321 million.

Even so, the company beat analysts' expectations, who estimated that the social gaming giant would report revenue of $US203 million and a loss of 4 cents a share. But Wall Street was unimpressed; the stock fell slightly in after-hours trading. The company also posted a modest profit of $US4.1 million, compared with a loss of $US85 million in the year-ago quarter.

"They've been going through a rough couple of quarters," said Brian Blau, an analyst with Gartner Research who follows the company.

 

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