Mark Pincus, CEO of Facebook gaming titan Zynga, has told investors the company can double the number of users that actively contribute to its revenue.
Zynga is far and away the most successful developer on Facebook, with 220 million monthly active users across its games, all of which are free to play. In the 12 months to September 30, however, just 7.7 million paid for virtual items.
Reuters reports that Pincus told investors in Boston yesterday that less than three per cent of Zynga's users are paying players, but added: "We could see that doubling."
With Zynga set to go public with an IPO before the year is out, the company is striving to show that it can not only increase revenue, but the proportion of users from which it profits. Eyebrows have already been raised at the SEC over Zynga's reliance on so small a percentage of its users, and on Facebook, the source of 95 per cent of its revenue.
To that end, during his presentation Pincus revealed that Zynga's daily average users on mobile devices had risen from 11.1 million in October to 13 million, a 17 per cent increase in a matter of weeks.
However, executives apparently dodged questions about player retention, which is a genuine source of investor concern. Mafia Wars 2, launched late in October, lost more than half its users in a little over four weeks.
Zynga was recently criticised by Take-Two CEO Strauss Zelnick, who said it had "disclosure issues…[and] very high churn" and that the reason its IPO had been delayed was because its metrics were "sketchy." According to Reuters, Zynga CEO John Schappert said in response that the company can quickly launch new games and attract more players.
Senior Zynga executives are currently on a tour of the US, presenting to investors as they seek to push up the company share price before the IPO. As we reported last week, Zynga has priced its shares at between $8.50 and $10 apiece, valuing it at $7 billion - a far cry from the $20 billion valuation it enjoyed before it announced its intent to go public.
Source: Reuters