Zynga returns to profit in spite of falling revenues

The Irish arm of downsized online game firm, Zynga last year returned to profit in spite of revenues tumbling.

According to accounts just filed by Zynga Game Ireland Ltd to the Companies Office, the firm recorded the $1.34m profit as revenues declined sharply by $155.9m, or 30%, from $511.6m to $355.7m in the 12 months to the end of December .

The $1.34m pre-tax profit last year followed the firm recording a pre-tax loss of $50.7m in 2012, a positive swing of $52m, with the 2012 loss attributable to impairments of investments and intangible assets.

The revenues generated by the Dublin-based unit — which was only established in 2010 — accounted for 41% of the corporation’s worldwide revenues of $873m in 2013. Corporation tax paid by the Irish unit totalled $380,345.

The firm is a leading provider of social game services. More than 1bn people have played one of their games, including Farmville, Zynga Poker, and Words with Friends.

Revenue is earned primarily from the sale of virtual goods to the players of its online games.

The directors point out that revenue from many of the company’s games tend to decline over time after reaching a peak of popularity and player usage.

The figures show that numbers employed at the Irish unit last year decreased by just under 20% from 57 to 46, with the current staff made up of mainly customer service agents and five administrative personnel.

Staff costs last year decreased from €3.56m to €3.09m while salaries to directors increased from $373,527 to $566,269.

In the first quarter of this year, Zynga Inc announced plans to reduce its global workforce by 15% or 314 employees.