FarmVille and Mafia Wars maker proposes initial public offering to SEC; number of shares and price range to be determined.
After months of anticipation, Zynga is going public. The social game giant today filed its Form S-1 with the Securities and Exchange Commission, proposing an initial public offering of stock in the company. There are still details yet to be determined, like how many shares will be sold and for how much.
Zynga is the creator of the wildly popular casual games FarmVille, CityVille, and Mafia Wars, which are played on the Facebook social network. CNBC expects the game company's public offering to be huge, in the range of $15 billion to $20 billion. Previously, the privately held company was valued at $10 billion--more than megapublisher Electronic Arts' market capitalization.
For 2010, Zynga reported revenues of more than $597 million, up dramatically from 2009's $121 million and $19 million in 2008. Last year was also the first profitable campaign for the company, which declared a net income of nearly $91 million after losses of $53 million and $22 million in 2009 and 2008, respectively. The company's games also boast a cumulative user base of 232 million active players a month.
As part of the filing, Zynga also reported a wealth of risk factors to its business. Chief among those is that if the company fails to remain on good terms with Facebook, its business could suffer. Among the other concerns cited are the company's still-evolving business, dependence on "a small percentage of players for nearly all our revenue," and relatively low barriers to entry for those who would seek to compete in the social gaming space.
In April, Zynga hired away EA's COO John Schappert. The company is also negotiating with the city of San Francisco for an exemption to a payroll tax that affects payments gleaned from IPOs.
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
It's not PC gamers @John_Read, it's just your average bored cubicle drone. PC gamers are busy playing PC games. However, this would be a great investment to make for people with the money to spend, whether you like Zynga or not. There's currently an "App Bubble" on the rise, and if you can jump in and jump out before it bursts, you're going to make an extreme profit.
It actually annoys me that Zynga is doing so well with their crappy games. While other game develepors who put in 10x more effort to their games, struggle at times.
i played these games for like 5 mins then then i realised that they were anything but games.....but the makers havnt realised that by now....
Mafia pissed me off, no matter how much I improved my defence I would still end up dying but I am addicted to Texas Holdem though.
Farmville was fun for a while, now i'm tired off it. I rather play pc or consolegames with a replay value. Which Farmville hasn't.
My girl loves Zynga... I wouldnt mind buying some shares of this... if it oppened at a low price.
heh all i can say is that we live in a world where micro-transactions are slowly dominating the playing field.. ..which saddens me
Man I cant stand these casual games. I hate the way the look, the way they play, and they way they try to get you to play more, constantly, the way they make you bother your friends, the way they spam you messages... But I'm going to invest the hell out of them.
Am i the only one who thinks Zynga is extremely overvalued? Its a bubble ready to burst.
Riding the coat-tails of Facebook was the best move they ever made. Some of their games have well over 10 million users, so this should be no surprise. As much as most of us on Gamespot don't play them (and scorn them accordingly), the FB gaming market is significant. And worldwide. And connected.
$15-$20 billion would make them the most valuable non-first party games company in the world. I'm surprised Facebook didn't try to scoop them up when they were worth less.
I think this is the time we will later call the "social media gaming bubble". Wonder when it will pop.
CityVille creator prices itself at upper range of valuation in preparation to begin trading on NASDAQ Friday.
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