Zynga has announced that it will not pursue real-money gambling in the United States during its quarterly conference call. Instead, Zynga will refocus its efforts on free-to-play gaming on mobile devices.
Speculators had been betting heavily on real-money gaming in Zynga’s future, after the company rolled out real money casino games in the UK. Competition is staunch in the real money gaming space, especially in the U.S. With casinos already entrenched with their physical brick and mortar establishments, Zynga would likely be fighting an uphill battle, despite having a large base of players on its free-to-play Texas Hold ‘Em game.
So what’s Zynga’s reasoning behind the announcement? According to a statement from the company, they believe that the biggest opportunities are in free to play social games, a space where they have had a lot of success in the past. However, Zynga has been troubled as of late. The transition away from Facebook games and into mobile has been a bumpy ride. They’ve seen their avg daily users halved and have had to slash many jobs in recent months to curb costs.
Zynga’s stock reacted negatively to the news, down nearly 15% at the time of this news release.