Games, United States (Public)
Last year’s rank: #13
Digital Content Revenue
$1,140,100,000 (100% of total)
Zynga games are the archetype for the freemium business model. Titles like Farmville and Empires & Allies don’t cost a cent to play. In 2011, Zynga attracted an average 58.1 million people every day to play them through social networks and mobile phones. But it nevertheless made a cool $1.14 billion (double that of the previous year) from sales of virtual goods, which players buy to get the most from their experience, and in-game advertising.
A $1 billion December IPO gave social gaming credence on Wall Street. Zynga then created some alarm by disclosing a $404 million loss thanks to stock-related compensation payouts. The share price has subsequently fallen to below its opening price, but Zynga remains well placed to ride growth curves at the nexus of mobile and social, redefining a big-box games industry that’s struggling, under its own weight, to keep up with the disruptors.
Zynga reported $1,065,648,000 in online game revenue (71 percent of it from virtual goods, 29 percent from consumable virtual goods) and $74,452,000 in advertising revenue. A symbiotic relationship with Facebook means the social network relies on Zynga for 12 percent of its own sales.
Source: SEC: 2011 Annual Report