Zynga files for IPO

FarmVille and Mafia Wars maker proposes initial public offering to SEC; number of shares and price range to be determined.

by

After months of anticipation, Zynga is going public. The social game giant today filed its Form S-1 with the Securities and Exchange Commission, proposing an initial public offering of stock in the company. There are still details yet to be determined, like how many shares will be sold and for how much.

Zynga's IPO is predicted to be between $15 billion and $20 billion.

Zynga is the creator of the wildly popular casual games FarmVille, CityVille, and Mafia Wars, which are played on the Facebook social network. CNBC expects the game company's public offering to be huge, in the range of $15 billion to $20 billion. Previously, the privately held company was valued at $10 billion--more than megapublisher Electronic Arts' market capitalization.

For 2010, Zynga reported revenues of more than $597 million, up dramatically from 2009's $121 million and $19 million in 2008. Last year was also the first profitable campaign for the company, which declared a net income of nearly $91 million after losses of $53 million and $22 million in 2009 and 2008, respectively. The company's games also boast a cumulative user base of 232 million active players a month.

As part of the filing, Zynga also reported a wealth of risk factors to its business. Chief among those is that if the company fails to remain on good terms with Facebook, its business could suffer. Among the other concerns cited are the company's still-evolving business, dependence on "a small percentage of players for nearly all our revenue," and relatively low barriers to entry for those who would seek to compete in the social gaming space.

In April, Zynga hired away EA's COO John Schappert. The company is also negotiating with the city of San Francisco for an exemption to a payroll tax that affects payments gleaned from IPOs.

Discussion

28 comments
CWZaft
CWZaft

It's not PC gamers @John_Read, it's just your average bored cubicle drone. PC gamers are busy playing PC games. However, this would be a great investment to make for people with the money to spend, whether you like Zynga or not. There's currently an "App Bubble" on the rise, and if you can jump in and jump out before it bursts, you're going to make an extreme profit.

John_Read
John_Read

can't believe PC gamers made Zynga rich

TheMegatonNuke
TheMegatonNuke

It actually annoys me that Zynga is doing so well with their crappy games. While other game develepors who put in 10x more effort to their games, struggle at times.

warhawk-geeby
warhawk-geeby

To be honest I'd rather play a proper game.. Not some social boasting activity.

Dynamo11
Dynamo11

One of the biggest companies in gaming... and I have never ever played any of their games.

GeneralArrow
GeneralArrow

My problem is with the exemption to a payroll tax, among manythings.

GeneralArrow
GeneralArrow

My problem is with the exemption to a payroll tax, among manythings.

rohanthedreamer
rohanthedreamer

i played these games for like 5 mins then then i realised that they were anything but games.....but the makers havnt realised that by now....

chisoxrule
chisoxrule

Hopefully, Zynga will be the next target for the hackers' hit list. :P

MrHatnClogs
MrHatnClogs

Mafia pissed me off, no matter how much I improved my defence I would still end up dying but I am addicted to Texas Holdem though.

nurnberg
nurnberg

This is just sad. This is not truly a real video game, it's more a rip-off like gambling.

seriousplayer_d
seriousplayer_d

Farmville was fun for a while, now i'm tired off it. I rather play pc or consolegames with a replay value. Which Farmville hasn't.

decoy1978
decoy1978

My girl loves Zynga... I wouldnt mind buying some shares of this... if it oppened at a low price.

Decrate
Decrate

heh all i can say is that we live in a world where micro-transactions are slowly dominating the playing field.. ..which saddens me

GAMERALL
GAMERALL

I almost feel sympathy for EA and Activision. :P

Chainer323
Chainer323

if i had the cash, i'd buy shares as soon as they became available

servb0ts
servb0ts

farmville to PSN/LIVE make some of our girlfriends happy

kwanzudood
kwanzudood

@deaththekidd What companies AREN'T overvalued nowadays? Maybe oil companies.

Cobra5
Cobra5

Man I cant stand these casual games. I hate the way the look, the way they play, and they way they try to get you to play more, constantly, the way they make you bother your friends, the way they spam you messages... But I'm going to invest the hell out of them.

sagejonathan
sagejonathan

how are people attracted to their games?

deathTHEkidd
deathTHEkidd

Am i the only one who thinks Zynga is extremely overvalued? Its a bubble ready to burst.

PixelAddict
PixelAddict

Riding the coat-tails of Facebook was the best move they ever made. Some of their games have well over 10 million users, so this should be no surprise. As much as most of us on Gamespot don't play them (and scorn them accordingly), the FB gaming market is significant. And worldwide. And connected.

Zero5000X
Zero5000X

$15-$20 billion would make them the most valuable non-first party games company in the world. I'm surprised Facebook didn't try to scoop them up when they were worth less.

raptures330
raptures330

I think this is the time we will later call the "social media gaming bubble". Wonder when it will pop.

ToTs_00
ToTs_00

Dear zynga.. go to hell. Your ruining the game industry

BlackTargetmark
BlackTargetmark

Holy Mother! Bigger than EA's market cap? How much is the IPO price?

dre256x
dre256x

hope they tank.. greedy