Zynga had appeared to be repositioning its efforts to focus on gambling. The company has launched Facebook gambling games in the UK, and owns popular properties like Zynga Poker and casino titles that could transition smoothly to real-money gaming. It seemed like a lucrative option for the company as it continued to falter in its shift to mobile. Zynga also had acquired Spooky Cool Labs, a social developer with extensive casino experience. But COO David Ko said the studio would create casual, non-real-money casino games, not real-money gambling games. Zynga investors had apparently expected Zynga to make the gambling shift: In February, when Nevada said it would legalize casino games online, shares got a notable boost. The changes in leadership and in gambling strategy come as Zynga continues to struggle as the market shifts from web to mobile. Zynga's revenues were down 31 percent for the quarter ended in June to $231 million. Zynga posted a net loss of $16 million for the quarter, smaller than the $23 million loss a year ago. Ko said on an earnings call, "These results are unacceptable. As Don [Mattrick] stated, we can do better."
Zynga believes its biggest opportunity is to focus on free to play social games. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.
Announcements
Zynga puts kibosh on real-money gambling plans in U.S.
There has been much talk about Zynga making a strategic move to cash in on real-money online gambling, but now the company says it won't pursue a gambling license in the U.S.