Zynga 2014 Annual Report Download - page 60

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Table of Contents
Revenue
2014 Compared to 2013.
Total revenue decreased $182.9 million in 2014 as a result of a decline in online game revenue offset by an increase in advertising and
other revenue. Bookings decreased by $21.9 million from 2013 to 2014 due to declines in existing games, declines in audience metrics and the
lack of successful new launches to offset these declines. ABPU increased from $0.053 in 2013 to $0.071 in 2014, due to a faster decline in
DAUs than the decline in bookings. DAUs decreased from 37 million in 2013 to 27 million in 2014 and MUPs decreased from 1.8 million in
2013 to 1.4 million in 2014.
Online game revenue decreased $222.0 million in 2014 as compared to the same period of the prior year. This decrease is primarily
attributable to decreases in revenue from FarmVille, ChefVille , CastleVille, Zynga Poker , CityVille and FrontierVille in the amounts of $87.7
million, $37.1 million, $36.6 million, $35.5 million, $23.7 million and $13.7 million, respectively. The decreases in online game revenue from
these games were due to overall decay rate in bookings and audience metrics. The decrease in online game revenue was partially offset by an
increase in online game revenue of $47.1 million from Hit it Rich! Slots . All other games accounted for the remaining net decrease of $34.8
million.
International revenue as a percentage of total revenue was 38% and 40% in 2014 and 2013, respectively.
In 2014, FarmVille 2 and Zynga Poker were our top two revenue-generating games and comprised 28% and 23%, respectively, of our
online game revenue for the period. No other game generated more than 10% of online game revenue during the year.
Consumable virtual goods accounted for 38% and 29% of online game revenue 2014 and 2013, respectively. Durable virtual goods
accounted for 62% and 71% of online game revenue in 2014 and 2013, respectively. The estimated weighted-average life of durable virtual
goods was 12 months in 2014 and 2013. Changes in our estimated average life of durable virtual goods during the twelve months ended
December 31, 2014 for various games resulted in a decrease in revenue, income from continuing operations and net income of $1.2 million,
which is the result of adjusting the remaining recognition period of deferred revenue generated in prior periods at the time of a change in
estimate. These changes in estimates did not impact our reported earnings per share for the twelve months ended December 31, 2014. For 2013,
changes in our estimated average life of durable virtual goods resulted in an increase in revenue, income from continuing operations and net
income of $12.3 million. These changes in estimates resulted in a $0.01 increase in our reported earnings per share for the year ended
December 31, 2013.
Advertising and other revenue increased $39.1 million from 2013 to 2014, due to a $39.3 million increase in in-game display ads as a
result of better optimization on mobile platforms and a $7.6 million increase in licensing revenue driven by the final licensing payment from a
strategic partner, offset by a $5.6 million decrease in in-game sponsorships and a $2.2 million decrease in in-game offers, engagement ads, and
other advertising revenue.
57
Year Ended December 31,
2013 to 2014
% Change
2012 to 2013
% Change
2014
2013
2012
(in thousands)
Revenue by type:
Online game
$
537,619
$
759,572
$
1,144,252
(29
)%
(34
)%
Advertising and other
152,791
113,694
137,015
34
%
(17
)%
Total revenue
$
690,410
$
873,266
$
1,281,267
(21
)%
(32
)%