Zynga, the mobile games company that has the most downloaded iPhone app in the U.S., is once again on the hunt after acquiring six properties in the past five years.
But while recent purchases – including last year’s $ 1.8bn deal for Turkey’s Bench Games – have been focused on mobile alone, Zynga chief executive Frank Gibeau said. that there were more opportunities for Zynga to get young teams pushing “further afield” into games that could be played on multiple devices.
“We’re going to do it [launch] new cross-platform games, games that can be played over mobile PCs and consoles together, ”Gibeau told the Financial Times.
Zynga is the owner Zynga Poker, Social Slots, Words with friends. It has recently received a major blow High heels!, a first-person game in which users walk around obstacles in platform shoes high enough to win prizes like “Queen! “This is the largest iPhone app in the US.
The game went viral on TikTok – the second most popular app – and is downloaded more than any other free app on the iOS App Store, including YouTube, Zoom and Clubhouse, according to App Annie, the mobile and analytics data provider. On Android, High heels! in the fourth place.
Zynga’s campaign has helped to introduce “casual casual” titles – free games made at this time that are free-to-play but can be very profitable through advertising – the revenue has helped 49 percent to $ 2bn.
Frank Gibeau: ‘Barriers to access to these things have fallen dramatically’ © David Paul Morris / Bloomberg
The company’s market value of $ 12bn is up more than 500 per cent in the last five years as mobile gaming has become the fastest growing segment of the gaming market. According to App Annie, gaming accounts for over a third of App Store downloads but makes up 70 percent of consumer spending.
The data provider projecting the market to exceed $ 120bn in consumer spending this year. That’s more than global record music revenue or film revenue including cinemas, mobile and streaming.
Gibeau told the FT that the rise of mobile gaming was causing “tectonic changes” in the industry as small budget teams can generate graphics engines from Unity and Unreal game development agencies, computing power from Amazon Web Services, and high-end internet performance from 5G, and then compete for attention with some of the largest companies in the world.
“When I was doing this 10 years ago at EA (Electronic Arts) you had to spend hundreds of millions of dollars in technology and infrastructure development machine for that to happen,” Gibeau said. “Now that the equipment is so good, small companies can get in. The barrier to access to these things has fallen dramatically. ”
Last year, 105 game purchases were received for a total of $ 17bn, the highest level in six years of Dealogic data. Owners of traditional games such as Activision Blizzard, the $ 80bn group behind it call of Duty, purchased Candy Crush Saga maker King in 2015 for $ 5.9bn and said last year that it would “take over all of our franchise mobile over time. EA, worth $ 41bn, said last week that it would pay $ 2.4bn for Glu Mobile, best known for its engaging game featuring Kim Kardashian.
The world’s largest companies are also involved, with Apple, Google and Amazon all seeking supremacy with “Netflix for gaming” streaming services. In contrast to these giants, Gibeau said: “We are clearly the new barbarians.”
He said Zynga has an advantage with the mobile-first strategy, as the big competitors are usually trying to turn token games into a free-to-play mobile experience. It’s easier to move to the other side, from mobile to tokens, “we’re capturing more data about what players are doing.”
Gibeau calls gaming “one of the richest places to run ads”, saying that Zynga sends its user video ads when they are engaged in a game; by watching the video they win prizes.
“Players who look at ads within games play the games longer,” he said. “But on YouTube, you are hit by an ad and you say, ‘Okay how fast can I avoid this? ‘It’s a different movement. ”
Zynga’s advertising business grew 47 percent in the last quarter to $ 117m in revenue.
In the coming year Zynga expects total revenue to climb 32 percent to $ 2.6bn, and predicts double-digit gains in 2022. The long-term outlook is reveal that Zynga expects rapid growth even though Covid-19 – which clearly impacted the gaming market – will decline and people will return to the workplace.
“This sector has not come to a head – growth is happening in AR, VR,” said Gibeau. “Growth has been put in for the next 10 years.”