Zynga in Trouble but Hopes for Real-Money Mobile and Social Wagers
Zynga reports
Q3 Zynga fiscal reports revealed net loos, but the social gaming firm is ready to enter real-money gambling.
Zynga’s Q3 reports released yesterday were better than expected, but did not manage to give a boost to the share prices troubled social media company.
There was a time when analysts thought that paying real money for a virtual fertilizer for your virtual carrots would be next great thing. Zynga was the name everybody was talking about. The aggressive social gaming start-up that was responsible for a great part of Facebook revenues.
Zynga went public in late 2011, raising $1 billion in the biggest American internet debut since Google began trading stocks. After a bit of hesitation, Zynga stocks went up to over $15.9.
Then came the fall. The San Francisco company revealed that players are not willing to pay as much real money for virtual as the stock market expected. Key employees left the CEO, Mark Pincus. By August, share prices were down to $3.
Yesterday Zynga reported a net loss of $52.72 million for the last fiscal quarter, even though every day 60 million people play its games. Virtual goods still attract a lot interest, in the first nine months of the year, Zynga had revenues of almost a billion dollars ($970 million to be precise).
Zynga’s future is mobile and social gambling
Mark Pincus does not give up easily. He announced his plans to create something like Zynga online casino, where players could play social games for real-money.
It makes sense. Zynga poker is still played by millions, and online blackjack is rumored to come out soon. The question is if and how real wagers could be introduced to the social games.
Yesterday Zynga and UK-based online gambling operator giant Bwin announced that the two companies are ready to form a partnership. Players in the United Kingdom will be able to play Zynga-themed slots and poker for real money next year.
We will see the Wall Street reaction to the news later today.