Social gaming company Zynga Inc. nearly doubled its revenue in the third quarter, but a fourfold increase in research and development costs damped profit.
For the quarter ended Sept. 30, Zynga took in $306.8 million in revenue from advertising and the sale of virtual goods within its games which include CityVille, Mafia Wars and FarmVille, the Los Angeles Times reports.
Zynga, whose games are played by more than 150 million users a month, had reported revenue of $170.7 million in the same period a year earlier, according to the Los Angeles Times.
Net income, however, fell 54% to $12.5 million in the third quarter, down from $27.2 million last year. In its second quarter, the company's profit dropped 90% to $1.4 million from $14 million a year earlier.
Zynga has been working aggressively launch as many games as possible to minimize the effect of a few failures.
This has led to a serious increase in spending, the Los Angeles Times reports. In the third quarter alone, Zynga spent $114.8 million on research and development, up from $39.8 million a year earlier.
At the same time, Zynga's payroll grew from 576 employees at the end of 2009 to 1,483 at the end of 2010, according to the Los Angeles Times. As of Sept. 30, the company counted 2,789 workers, doubling its workforce in nine months through acquisitions and aggressive hiring.
