Facebook was Zynga’s path to glory — the Facebook game FarmVille, a virtual agribusiness, put the San Francisco social-gaming company on the map. But since its $7 billion IPO in 2011, Zynga has been having a rough time of it, culminating in the axing of 520 employees, or 18 percent of its workforce, last month.
On July 1, the job cuts reached founding CEO Mark Pincus, who will be replaced by former Microsoft Xbox chief Don Mattrick. (Pincus will stay on as chief products officer.) The change was enough to boost Zynga’s stock a bit, but on Thursday the company is giving investors something else to get excited about: Gambling. With real money. On Facebook.
At a World Gaming Executive Summit in Barcelona, Facebook’s Sean Ryan is showcasing two new Zynga games, ZyngaPlusPoker and ZyngaPlusCasino, according to VentureBeat‘s Dean Takahashi. Zynga “says that social gaming remains its heart and soul,” Takahashi says, “but the gambling games are a logical extension for fans who want to bet real money and win it in social games.”
The first step is conquering Britain, where online gambling is legal and regulated. In April, Zynga released online and downloadable versions of its two real-money games in the U.K., in partnership with established British poker company Bwin.Party Digital Entertainment. Facebook and mobile versions are coming soon.
Americans (and Britons) can already play Zynga Poker on Facebook, where you pay real money for virtual chips that you can never cash out. The new versions, when they drop, will let people win (and lose, of course) real cash. Investors applauded the news because, well, gambling generates a whole lot of money. The Facebook component is key to Zynga’s strategy.
Zynga and its investors believe, with some justification, that “the real-money Facebook games could be a game changer, luring in the general U.K. population that has known Zynga for years as a social gaming pioneer,” says Jennifer Booton at Fox Business. People who have been playing FarmVille and Mafia Wars may not be big on online gambling, but Zynga could change that, with Facebook’s imprimatur.
Britain is “the ideal test-case for Zynga, with it’s concentration of seasoned online gamblers contributing to a £2.3 billion ($3.4 billion) industry for the country,” says Lauren Hockenson at GigaOm. But the company’s “sights are no doubt set on the United States, which, despite its currently restrictive gambling laws, could be worth $9.3 billion by 2020.”
