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Zynga presentation-Corporate Strategy
- 1. Team members Mateo FadulGonzalez Rafael Navarro Domenic Millen Aman Mehra Siriorn Vichaiwatanapanich Nabeeha Qazi
- 2. • Company Overview •Zynga’s Industry Position • Revenue Composition • Company Value Chain Evolution • Financial Analysis • Strategy Analysis • Zynga’s Future Prospects Agenda
- 3. • Created inJanuary 2007 and based in San Francisco, California • The world’s leading provider of social game services • Social Networks dependent (i.e. Facebook), also Mobile and Zynga.com • Social games & internet gaming pioneer • Leadership position: investment in their people, content, brand, technology and infrastructure • Connect the world through games Overview
- 4. Profit Pool Profit poollargely dominated by Retailers and Software developers
- 5. Zynga’s Industry Position •Develops its own content and software • Offer games through online & mobile platforms • Use of existing infrastructure (PC & social websites) • Huge savings (+ Profit)
- 6. Revenue Stream Online Gaming(89%) Advertising (11%) • Consumable Virtual Goods (energy) • Durable Virtual Goods (tractors) 30% 70% Geographical Distribution
- 7. Revenue Stream • Zyngatop three games accounts for 55% of Revenues, of the remaining 45%, no single accounts for more than 10% 55%
- 8. Timeline Company started First sale of virtual goods Aquisition ofYoVille First 3rd party in- game advertising IPO Launched Draw Something Real- money gambling Expand API to increase game penetration Texas Holdem Expanded virtual goods concept to other games Facebook notific- ations Large rollout of mobile games Large scale in-game advertising Slashed workforce Application program- ming interface (API) Expand real-money gambling business Launched Farmville Agreement with Facebook signed Facebook credits Agreement with Facebook revised Zynga with Friends 2007 2008 2009 2010 2011 2012 2013 2014 2015
- 9. Financial Performance - 200,000.00 400,000.00 600,000.00 800,000.00 1,000,000.00 1,200,000.00 1,400,000.00 2009 20102011 2012 Online game Advertising Total Revenue 570% 85% 7% -36% 226% 84% Revenue Growth (in thousands $)
- 10. Financial Ratios -43% 5% -35% -16% -50% -40% -30% -20% -10% 0% 10% 2009 20102011 2012 Profit margin
- 11. Financial Ratios 1.08 0.57 0.30 0.29 - 0.20 0.40 0.60 0.80 1.00 1.20 20092010 2011 2012 Debt Ratio
- 12. Financial Ratios 2009 20102011 2012 ROA -20.41% 2.51% -16.07% -8.13% ROE 245.94% 5.78% -23.11% -11.47% -50.00% 0.00% 50.00% 100.00% 150.00% 200.00% 250.00% 300.00% ROA & ROE
- 13. Financial Evaluation ZNGA DNACFEA Market Cap: 2.76B 3.43B 5.61B Employees: 3,058 1,810 9,200 Revenue (ttm): 1.28B 2.45B 3.96B Gross Margin (ttm): 73% 74% 64% EBITDA (ttm): 54.00M 1.05B 393.00M Operating Margin (ttm): -7% 40% 4% Net Income (ttm): -209.45M 561.80M 175.00M Net Profit Margin : -16% 23% 4% EPS (ttm): -0.28 4.02 0.55 P/E (ttm): N/A 6.33 34.17 PEG (5 yr expected): -3.35 N/A 1.43 P/S (ttm): 2.16 1.39 1.41 Compare to 2 main competitors: ZNGA = Zynga, Inc. DNACF = DeNA Co., Ltd. EA = Electronic Arts Inc.
- 14. Industry Future Prospects Mobilegames becoming popular Growing competition from US & Intl. firms Facebook opening up to more game developers Demand for sophisticated games driving up costs
- 15. Zynga’s Future Prospects Establishedcustomers (players) base Reduced dependence on Facebook Constant adaptations/ Innovations Core mgt. team is not the same Reduced R&D expenses Business integration issues
- 16. Zynga’s Future Prospects IndustryAttractiveness High Medium Low MediumLowHigh BusinessPosition
- 17.
Editor's Notes
- #15 At an industry level: Mobile gaming gaining popularity Growing competition from US firms as well as international players like Tencent in China Social platforms like Facebook allowing more game developers Demand for sophisticated games driving up the costs
- #16 At company level: Established customers (players) base Reduced dependence on Facebook Core management team is no more Litigation issues with EA Integration issues that come with acquisitions