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Zynga’s sales are up 47% as mobile gamers can’t play enough during a pandemic

The shares of Zynga Inc. initially rose 10% in out-of-hours trading after a earnings report again proving that home-bound Americans bing on digital games.

The mobile gaming company reported a net loss of $ 150 million in the second quarter, or 16 cents per share, compared to a loss of $ 55.8 million, or 6 cents per share, in the year-ago quarter.

Zynga’s ZNGA,
-1.17%
sales improved 47% to $ 452 million from $ 306.5 million a year ago. Sales included record online games revenue of $ 388 million, up 61% year-on-year. In a nod to the strong outlook, the company also increased full-year revenue expectations by $ 110 million to $ 1.8 billion.

Analysts surveyed by FactSet expected an adjusted loss of 13 cents per share on revenue of $ 505 million.

With no foreseeable end in sight for on-the-spot programs, Americans are increasingly turning to gaming as a new form of social media – one in which they can chat and collaborate to solve a puzzle or adventure game. And that translates to record levels of engagement, retention, and making money, say Zynga executives.

“If you asked me New Year’s Eve [2019]”I didn’t think it would happen,” Zynga director Frank Gibeau told MarketWatch on Wednesday in a telephone interview. “But the pandemic has changed that. Gaming is very resilient during economic difficulties. It’s a great way to connect. ‘

Popular titles “Empires Puzzles”, “Merge Dragons”, “Merge Magic” and “Game of Thrones Slots Casino” were the biggest growth drivers, according to Zynga. The San Francisco-based company also said it is buying developer Rollic, and on July 1 it closed the acquisition of Peak, a maker of mobile puzzle games.

Zynga’s strong quarter reflected that of rival Activision Blizzard Inc. ATVI,
-2.46%
and traditional game company Take-Two Interactive Software Inc. TTWO,
-0.84%
earlier this week. Activision reported a second-quarter net result of $ 580 million, or 75 cents per share, compared to $ 328 million, or 43 cents per share, in the same period last year, while Take-Two said sales grew 54% to a record of 831.3 million.

See also: Activision Blizzard results, outlook at the top of Wall Street estimates

Zynga shares have risen 62% this year. The wider S&P 500 index SPX,
+ 0.64%
will improve by 3% in 2020.

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