Zynga Moves into Real Money Gambling Operations

Zynga is the world’s largest provider of social media games, and has developed plans for developing real-money gaming applications of its social games.  The company’s financial performance in 2012 was part of the reason for the shift to gambling, along with a deteriorating relationship with the world’s largest social media site Facebook.  Zynga also plans to develop mobile gaming applications in order to acquire leading market share in the expanding mobile gambling market, while arranging gambling licensing agreements in markets around the world.

Zynga’s position as the top social game developer has been challenged in recent months by King.com, which has developed the increasingly popular Candy Crush Saga game.  Candy Crush has attracted over 10 million users each month, while Zynga’s latest launch Coasterville has only garnished an average 1 million monthly users.  The decline in user activity has contributed to slumping financial performance for the company, and continuous challenges to their position as leading social game developer has forced the company to diversify its services.

Earlier in 2012, Zynga reached an agreement with Facebook to develop real-money gaming versions of its popular Farmville and Farmville2 games.  The agreement would have featured Zynga real-money games in advertisements on Facebook pages, but the social media giant revised conditions in the contract later in the year.  The new arrangement would have forced Zynga to compete with other game developers for advertising space on Facebook’s pages, and as a result the partnership came undone.

Zynga turned to other methods of developing real-money games, and found a new partner with bwin.party Digital Entertainment.  This new arrangement will allow Zynga to develop real-money games for distribution on bwin.party websites in the United Kingdom as a test market, which they hope will prove successful and warrant expansion into other markets.  Zynga is also one of the first companies to apply for an online gambling license in Nevada, where the state legalized online gambling operations near the end of 2012.

Zynga has also hired a mobile gaming development team to facilitate mobile designs for its real-money games.  The company also has its own online casino in development that will feature slots and other games.  Most investors consider Zynga’s real-money gambling strategy crucial to its survival, and are willing to give the company time to make the transition from development into application.

While Zynga’s future remains uncertain, it’s indisputable that the company’s social games have captured loyal players – many of whom are likely willing have more fun with the games by putting real money on the line. 

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