Real Money Gambling Can Save Zynga Stock
Towards the end of last week a number of large US tech companies saw their share prices fall by more than 5% which has caused some to speculate that another 1990s style tech crash could be on the way.
Amongst these companies were LinkedIn (12.99%), Twitter (8.79%), Netflix (6.01%), Facebook (5.43%), Zynga (4.98%), Amazon (4.52%) and Pandora (3.89%).
If Zynga wants to avoid following the trend then it may need to aggressively expand into real-money gambling. While the company is best known for its FarmVille games, a quick examination shows that its online poker website is easily its best earner.
The company’s latest annual filing showed that Zynga Poker is the biggest free-to-play online poker game in the world. In 2013 Zynga Poker was the top performer by revenue; it generated 21% of total online game revenue for the company, up from 19% in 2012.
Behind Zynga Poker was FarmVille 2 at 17%. This means that Zynga Poker makes almost 25% more revenue that FarmVille 2.
These figures show that if Zynga wants to avoid the market trend of tech companies losing value, then it should quickly expand its real-money offerings which clearly have the potential to be the company’s highest earner.