From Venture Beat – Real-money gambling and FarmVille just don’t mix.
Zynga chief operations officer David Ko said in an analyst conference call today that the company decided not to invest in U.S. real-money online gambling because it needs to stay focused on social gaming and its core casual audience.
The San Francisco company slightly beat Wall Street expectations, but it continues to bleed users. This, and the decision to withdraw its plans to bid for real-money online gambling licenses in the U.S., led to a tumble in the company’s stock price after-hours trading. The stock is now down about 12 percent to $3.05 a share.
Ko noted that Zynga Poker, the company’s big money maker, slipped in the second quarter because “competitors are closing the gap.” The poker game competes with rivals such as Double Down Interactive and other social casino game companies. Ko said Zynga saw a decline in part because of a rise in “illegitimate credit card activity” on the web, where people pay for virtual poker chips with credit cards. He said he believes the growth in poker is in the casual end of the market, not the real-money gambling side.
“We must stay focused on our priorities. … The decision we made around real-money gambling was around focus,” Ko said after a question from an analyst on the call. He said the company needs to execute on its existing social games.
