The social gaming sector is heating up and has many investors excited. Zynga chief Mark Pincus has announced that Zynga will offer a real money poker app in 2013. Pincus made the announcement to investors concerned about the game developer’s recent problems. Zynga has closed three offices and has laid off 5% of its staff. A recent financial posting for Zynga revealed a loss of $22.8 million. Since online bingo and poker are not legal in the United States it is likely that Zynga will target the UK gaming market.
Market research confirms that there is big money to be made from social gambling. Most Zynga users typically spend about $2 to $3 dollars a month and Zynga has millions of regular users. It is easy to see how this translates into big bucks for Zynga. Currently the Entertainment Software Rating Board gives gambling sites an “Adults Only“ rating which some gaming companies say limits their marketing options. Zynga believes that because of social gaming the demographics will change and the company plans to use different marketing strategies. Zynga is hoping that real money gaming will save the company which has been plagued by problems.
Zynga’s IPO did not perform as expected recently Bwin Party Gaming announced a partnership with Zynga. Zynga and Bwin will offer real money poker and a suite of casino games like slots. Many expect a slot game based on the company’s flagship game Farmville which has been one of the most popular games on Facebook. The partnership will launch their offerings in the UK early in 2013. After the announcement Zynga shares rose by 16% and many investors see the partnership as a ground floor opportunity. Zynga also announced that the company will use its cash reserves to buy back its now discounted stocks.
Some experts say that Zynga is trying to position itself favorable if online poker is legalized in the United States. Currently over 35 million people play Zynga poker every month. Many large US casino companies are seeking strategic alliances with European online gaming operators to be ready when online poker is legalized in the US. Zynga held the company’s first PokerCon, a two-day poker convention at the Palms Casino in Las Vegas. Zynga is now a major player in the online gaming sector and the future looks very bright for the company.