Social game maker Zynga files for $1 billion IPO

Social game maker Zynga files for $1 billion IPO

Summary: Zynga, the social gaming company behind FarmVille and CityVille, has filed a $1 billion IPO. The company now says it has 232 million monthly active users, posting 2010 revenue of $597 million.

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Zynga, the company behind Facebook social gaming phenomena like FarmVille and CityVille, on Friday filed a $1 billion Initial Public Offering (IPO) with the Securities & Exchange Commission (SEC).

Some interesting notes from an initial perusal of the IPO:

Zynga says that it's now operating in 166 countries - the company counts 60 million "daily active users" and 232 million "monthly active users." That transltes into 2 billion minuts of play per ay with 38,000 virtual items created every second. Zynga also reports that its 2010 revenue was $597 million, compared to $121 million for 2009 and 19 million for 2008.

What makes Zynga's large IPO filing even more remarkable is one of the company's revenue streams: essentially, the sale of goods that only exist within the game, managed through in-game microtransactions. Players of its Facebook games, for example, use Facebook Credits (purchased with a credit card, PayPal or gift card) to purchase virtual goods that enhance their experience within the game. Zynga also derives revenue from in-game advertising.

Zynga got started in 2007 and has followed a rapid path towards success ever since. After raising venture capital and attracting millions of gamers on Facebook, the company has expanded its product portfolio to include mobile games for iOS and Android platforms, as well as other Web-based games. Zynga has also been on almost constant prowl for additional independent game studios to acquire.

Zynga's underwriters include Morgan Stanley, Goldman, Sachs & Co. and BofA Merrill Lynch, according to the SEC filing.

The move comes one day after Halo creator Bungie announced the launch of Bungie Aerospace, a new venture that will focus on fostering partnerships with independent mobile and social game developers. The first game out of the gate is Crimson from Harebrained Schemes, due out this summer for iOS and Android.

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  • RE: Social game maker Zynga files for $1 billion IPO

    1 billion dollars for Farmville? If this is not a bubble then what is?
    Scrabbler
    • RE: Social game maker Zynga files for $1 billion IPO

      @Scrabbler
      +1.
      Ram U
    • RE: Social game maker Zynga files for $1 billion IPO

      @Scrabbler

      Bubbleville?

      The bigger gaming going on is the social engineering-gaming of the financial markets.

      What's going on? Are pension and mutual fund managers getting wined and dined (and maybe more) to wastefully, recklessly invest their client's savings in the secondary markets, to further inflate the Facebook/Zynga/Groupon/etc.. bubble?
      voltrarian
  • RE: Social game maker Zynga files for $1 billion IPO

    The only two companies which enable global users to buy goods in an easy way are Facebook and Apple. Facebook trough it's Facebook credits Zynga card payment systems, which let users buy virtual goods for their games with real money. This means cash and it also means net income, in the past most games needed to use a credit card which today is very pressured because of the economy problems in 2008, most users are now buying these pre-paid cards with cash, which is making these companies: Apple and Facebook to reach a global base of customers from all the countries in the world. I think this is a success story that probably would make other game/application providers offer in the future. A big company would be Microsoft though their Windows 8 tablet/mobile application marketplace. If they use only credit card payments, they'll be doomed.
    Gabriel Hernandez
  • bubble bubble

    Remember, what happen to Baidu, Inc. China's very own Google. At one point it touched $800 and now, 2 weeks back it was @ $116.
    HSS5
  • Incredible

    The company hasn't reach $50M in revenue (total since creation) and somehow it is supposed to be worth $1 billion.
    wackoae
  • Who in their right mind

    spends real money on these "virtual goods"? I have a pretend car that's for sale. I drew it in paint. Starting bid is $1.
    crazydanr@...
  • RE: Social game maker Zynga files for $1 billion IPO

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  • This will be remembered as:

    The great social bubble of 2012.
    Tommy S.
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