The Irish subsidiary of online games firm Zynga, which cut its workforce here by 60 per cent last year, saw profits nosedive in 2015, newly filed accounts show.
Zynga Game Ireland Limited, whose parent is behind popular video games such as Farmville, recorded profits of just $552,439 (€512,936) for the 12 months ending December 2015. This comes after the company enjoyed a more than fourfold pre-tax profit increase to $6.48 million a year earlier.
Turnover declined to $257 million versus $263.7 million in the previous year, while gross profit fell to $117 million from $144 million, or 45.7 per cent of revenue versus 54.6 per cent in 2015.
Zynga rose to prominence with Farmville, one of the first big social media gaming successes. However, it has struggled to find follow-up hits, with its stock falling 85 per cent from its market cap high of €9 billion achieved in late 2011.
The company’s parent earlier this month posted a 6.8 per cent decline in revenue and swung to a loss in the latest quarter as it continued to lose users.
Zynga, which was forced to put its San Francisco headquarters up for sale earlier this year, cut 297 jobs worldwide in 2015, equivalent to 18 per cent of its workforce. The Irish operation lost over 20 people.
The company said it employed just seven people in Ireland at the end of 2015. Employee-related costs fell to $1.88 million from $2.73 million. Directors’ remuneration amounted to $330,116 as against $246,949 in 2014.
The Irish unit was owed $62.9 million from its parent and other subsidiaries, down from $83.7 million in the prior year.
“There is a decline in revenues driven by a global decrease in sales year over year. The decrease in revenue is mainly due to a drop in user pay bookings as well as revenues from certain games,” the company said.
“The business depends on the company’s ability to consistently and timely launch new games across multiple platforms and devices that achieve significant popularity and have the potential to become franchise games. A small number of games have generated a majority of the revenues,” it added.