The impact of Rollic and Peak on Zynga’s Q3 results

by Batuhan Avucan

After the acquisition of Rollic and Peak, Zynga recently announced its Q3 results for 2020. For Zynga, this was the first quarter that the titles of Peak and Rollic were included in the financial results.

We made an exclusive interview with Zynga’s President of Publishing, Bernard Kim, and talked about the latest figures and their expectations for the next quarter.

We’re going to deliver the best annual revenue and bookings in Zynga history this year. I don’t know what’s going to happen in this quarter versus previous quarters. I do think it’s going to be a holiday season unlike any we’ve seen before.

Batuhan: Let’s start with Q3 results. Most of the companies in the real world had a financial crisis during COVID-19 times. What kind of positive and negative impact did you see in the gaming industry? Is there anything beneficial for the Q3 results?

BK: As our Q3 results of 2020, this was the quarter with the highest figures in Zynga history for us. So, on our performance on the financial performance metrics, we are really pleased with the way that Zynga executed in this surreal and unprecedented environment. Most of our offices are completely “work from home” now, and it looks like this will continue until next summer. The company has kind of had to adapt from the office environment to the remote working environment where Zoom meetings were. I think, the company has adjusted to that transition super well and most of that is driven because of the needs of our players. So, our players are engaging more with our software then they have before. They want that social connection through games. One of the parts that experienced the most increase in our games was chat in the Covid environment. It grew 3x during these times.

So, what now our team is working on is making sure that we’re delivering against that higher engagement. We deliver more social mechanics where people can connect with one another, where they cooperate or compete with one another in certain requests in our titles. Those are a really positive impact on engagement numbers across Zynga.

This environment is like a shelter at home. You know, people spend more time at home with their families but also add mobile gaming into their daily routine. I think it affected some businesses negatively, but overall, it had a positive effect on gaming. Because people are adding gaming into their social routine. I think it’s because they want another platform to connect, compete, have fun, and maybe escape a little bit. Mobile gaming provides those in a really great environment.

Bernard kim

Bernard Kim shared his opinion about Q3 with Mobidictum.

Batuhan: Having that transition for a big company like you must be hard but it’s glad to hear that everything was smooth in the end. What kind of impact did you saw in your forever franchises, social slots, casual card, and other games?

BK: We have one of the most diversified live services portfolios of any games company. In some cases, I think that’s really positive and sometimes it requires us to have multiple different tasks to focus on across very different players. Some of the data I can provide is that social slots actually had all-time record revenue. We had record revenues across Word with Friends, CSR 2, and our casual card portfolio. So, players are choosing to play our games. It’s been really exciting to see our performance of live services. Then, we have the integration with Peak. It’s our first full quarter of performance across Toon Blast and Toy Blast from Peak Games and that full quarter performance has been really strong year-over-year and quarter-over-quarter for Zynga.

Batuhan: My next question was that actually. What was the impact of Peak on the revenue? I think this is the first time that you shared the revenue of Toon Blast and Toy Blast?

BK: Yes. The roles are under Zynga. They are no longer a private company. Their revenue internationally and locally comes up into the Zynga portfolio and you know we’re really excited about the performance, our booking as a total company is up 59 percent year over year. It’s really fun for us. You know, we’ve gone from turnaround stage to growing live services then we add companies into our family. Seeing those titles perform really well is kind of a multi-year growth strategy coming into reality. So, Toon Blast and Toy Blast have been a really great addition to Zynga. We’re really excited about the way that teams culturally match and share best practices.

Batuhan: Can we comment on any impact on Istanbul studios like new candidates, growth of the team, etc.?

BK: You know, well, one of the things that we promised to our teams joining Zynga is that they maintain their autonomy. Anything we have provided is like sharing ideas, maybe some execution around scaling businesses together. When it comes to culture, the leadership, what they’re doing in the local market, recruit the best talent, that stays the same. So, I’m happy to report that not a lot has changed with both Rollic and Peak.

Bernard Kim: “We’re really excited for our first quarter with Rollic as part of Zynga.”

Batuhan: Then let’s speak about the hypercasual part. Compere to your forever franchises and slot games casino games, what do you expect for hypercasual games for Q4. What is the expectation in the right of hypercasual?

BK: You know, for us, this is a new field. Our view is to build organically in this place. We launch new games like we did Harry Potter: Puzzles and Spells which we’re so excited about starting that project. The way that game is that its setup so that we believe that players will play that game for 10 years of their lives. When it comes to hypercasual, it’s different gameplay. You know, people can jump into gameplay, they can jump up really easily. There is no first-time user experience.

We’re really excited about our first quarter with Rollic as part of Zynga. You know, I think in this case we’re going to learn as much from the Rollic management team then the other way around. So, we just love the spirit and the energy which they go up to the marketplace. Their players, their network, and some of the practices they use are very different than we do in Zynga. It’s just really great to bring these teams together and that’s what I love is this culture sharing. We’re learning as much from the acquired company as they are from us.

Batuhan: Q3 was the best quarter so far. The future is ahead, Q4 is coming up. COVID-19 crisis hasn’t changed much. In Europe, lockdowns may be coming again. What do you expect for Q4?

BK: We’re going to deliver the best annual revenue and bookings in Zynga history this year. I don’t know what’s going to happen in this quarter versus previous quarters. I do think it’s going to be a holiday season unlike any we’ve seen before. You know, digital purchases or giving digital gift cards will be very very popular. This holiday time period, people probably will have less time on planes or cars, traveling to visit family and friends. They will spend more time at home. More people can be connected through games like Words with Friends, Harry Potter or Toon Blast. You know, these all are environments to communicate, be socially connected in a safe environment. That’s what we can do. We don’t know what’s going to happen with the policies of local countries, new hardware, and all the other things. We just want to make sure to provide great services and games that players will love. That’s what all we can control.

Batuhan: You’re positioning yourself not as a mobile game company but as an entertainment growth leader. Do you see yourself expanding on other platforms or other entertainment-related space?

BK: We’ve made of that on interactive software, where players can touch and change their fate and their fun level by playing software versus a lean-back experience where you’re watching a movie you can’t interact with. When it’s come to platforms, we just want to be where the more players are going to be. What players are doing is that they might be sitting on their couch and Netflix in the background. But they’re also playing mobile games like Words with Friends or Zynga Poker. That’s an exciting environment to be in. When it’s come to multiple platforms we’re always exploring, we’ve made investments and partnerships. As I said, we want to be where players are. And you know, I don’t think we’re a mobile-only company but that is our focus.

Batuhan: Do you have any comments to add?

BK: I’m just really proud of the way the team is executed against our growth strategy. It’s like the fun part of the business. We completed the turnaround stage and we’re in the growth stage. Having launched a hit new game like Harry Potter: Puzzles and Spells continue to drive momentum and confidence in the team.

Who is Bernard Kim?

Bernard Kim, President of Publishing for Zynga, is a mobile gaming and interactive entertainment expert with more than 15 years of experience. Kim is responsible for Zynga’s global marketing, user acquisition, ad monetization, revenue, communications, consumer insights, data science, product management, business development, and partnerships while overseeing how the company brings its games and services to players.
Bernard Kim recently led the acquisitions of Peak, Gram Games, Rollic, and Small Giant Games. In August of 2019, he accepted PocketGamer’s #1 Top Developer award on behalf of Zynga.
Before joining Zynga, Bernard spent nearly 10 years at Electronic Arts Inc., as the company’s Senior Vice President of Mobile Publishing and served as Director of Sales and Channel Strategy at The Walt Disney Company.

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