Zynga Exploring Subscriptions for Games as Revenue Soars

Zynga is “testing and exploring” bringing subscription services to some of its games, Bernard Kim, the president of publishing told Variety shortly after its quarterly earnings report hit on Wednesday.

The company’s revenue was $265 million for its first quarter, which ended on March 31. That’s up 27% compared to the same period last fiscal year. Those results were driven by “Merge Dragons!” and “Empires & Puzzles,” as well as “strong contributions” from racing title “CSR2,” “Words with Friends,” and “Hit It Rich! Slots,” according to the company.

During its earnings call, Zynga Chief Executive Officer Frank Gibeau noted that subscriptions will be a “very viable business model” for the company in the long term and in the near term that it may be a good fit for some games.

Kim told Variety that the company was examining the notion of a subscription service for games like “Words With Friends” and that it would deliver extra content to players.

“When it comes to Zynga we try to put our customers first,” Kim said. “We want to make sure we are testing it properly before we roll it out because once we do, we can’t just roll it back.”

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Word With Friends” is one of Zynga’s five “forever franchises,” or game franchise that the company believes have a long shelf-life, fosters the sort of play that encourages daily play and earns more than $100 million a year in revenue. The other forever franchises are “CSR Racing,” Empires & Puzzles,” “Merge Dragons!,” and “Zynga Poker.”

The plan moving forward for the company is to try and identify and build new forever franchises. To do that, Kim said, the company will look to its own franchises and some of the IP the company now has access to for future games. That includes “Game of Thrones,” which the company just announced a slot game for, “Harry Potter,” and “Star Wars.”

The company’s top titles, along with its work on those new IP titles, underlines the company’s long-term shift from creating Facebook games, to titles that play on smartphones. Zynga’s recent purchase of Gram Games and Small Giant Games also underscores that shift.  Kim said the company’s primary focus right now is on three major areas: live services, building and buying new forever games, and investing in emerging and new markets.

While Kim said the company is excited about the growth and potential in the mobile games market, Gibeau said Zynga is unlikely to play any role in Apple’s recently announced Arcade subscription service.

Gibeau noted that the Arcade service is focused on premium games, and Zynga is a company that focuses on free-to-play. Kim echoed that sentiment.

Apple Arcade is going after an audience in the market that wants to finish games, playing them from start to end,” he said. “We love creative thinking like that, it brings tremendous exposure to the category of mobile gaming.

“We believe we are in a renaissance of mobile gaming and that in-app purchases and the app economy is still in its infancy.”

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