(Corrects percent and year of sales projection in seventh paragraph of story published Feb. 14)
Feb. 14 (Bloomberg) -- Zynga Inc., the biggest developer of games for social-networking sites, topped analysts’ fourth-quarter revenue estimates as new titles such as “Hidden Chronicles” and “CastleVille” added millions of players.
Sales rose 59 percent to $311.2 million in the period, San Francisco-based Zynga said today in a statement. Analysts had predicted $301.1 million on average, according to a Bloomberg survey. Excluding some costs, profit was 5 cents a share, higher than the 3-cent estimate.
Zynga, which raised $1 billion in a December initial public offering, is the dominant developer of games for Facebook Inc.’s site. Its sales got a boost from newer games, which may be enticing users to spend more money, said Atul Bagga, an analyst at Lazard Capital Markets in San Francisco.
“The monetization for games like ‘Hidden Chronicles’ is meaningfully higher than their older games,” Bagga said in an interview before the earnings report. He recommends buying Zynga’s stock.
Zynga rose in late trading after the report. The stock, up 44 percent since it began trading Dec. 16, climbed 7 percent to $14.35 at the close in New York.
The shares got a boost this month when Facebook filed for its own IPO. Facebook, the world’s biggest social network, said that it relies on Zynga for 12 percent of its revenue. Facebook takes a 30 percent cut from purchases of virtual goods within Zynga games.
Social games will generate $5.33 billion this year, an increase of 39 percent since last year, according to Lazard. By 2015, the market could grow to $8.98 billion.
“Hidden Chronicles,” released last month, has become Zynga’s third most popular game, with 30.2 million monthly users, according to research firm AppData. It ranks behind two more established games, “CityVille” and “Texas HoldEm Poker.”
Electronic Arts Inc. has been Zynga’s chief rival in social games, with its “Sims Social” game attracting 20.9 million monthly users. Rovio Entertainment Oy emerged as a competitor this week, when it released a version of its popular “Angry Birds” game for Facebook.
Zynga operates six out of the seven top games on Facebook, according to AppData.
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