Social gaming company Zynga saw a sharp increase in gaming revenue and overall revenue, but still made a $23m net loss in the first quarter of 2021.
Online gaming revenue, fueled by Zynga’s Toon Blast, Toy Blast and Harry Potter: Puzzles and Spells offerings, totaled at $557m, an increase of 61.7% year on year.
The addition of revenue from advertising and other revenue at $123.3m, a 107% increase compared to the first quarter of 2020, brings the total revenue for Q1 to $680.3m. This a 68.4% increase year-on-year. Due to this growth, Zynga has predicted that it will end 2021 with $2.7bn in revenue.
However, the business’ costs and expenses amounted to a $685.8m. This was a rise of 38.4% year-on-year.
The cost of revenue came to $260.7m and sales and marketing costs came to $248.7m, a 78.0% and 101.8% rise respectively compared to Q1 in 2020.
Research and development costs were $140.7m, and administrative costs $35.7m.
The total costs amounted to $685.8m. This was a rise of 38.4% year-on-year and led to a $5.5m operating loss for Zynga, which was 80.0% less than 2020’s loss.
Interest income came to $1.7m, while interest expense brought Zynga further into debt, costing $14.7m. Other income expenses, totaling to $8.9m, and income tax provisions, coming to $13.4m, brought Zynga’s total net loss to $23.0m, a reduction of 56.6% compared to the loss in Q1 of 2020.
“Our tremendous quarterly revenue and bookings were driven by breakout performances from our live services, new games and hyper-casual portfolio.” said Zynga in a statement.
“In addition, we are making significant progress on our cross-platform play initiative.”
Despite a difficult year in 2020, Zynga saw a 49.4% increase in revenue year-on-year.
Earlier today, Zynga entered an agreement to acquire advertisement platform Chartboost for $250m.