Zynga’s Pops with UK Premier of Real-Money Gambling

Michael Teague |

Zynga’s Pops with UK Premier of Real-Money GamblingOnline gaming company Zynga (ZNGA) announced on Wednesday that it would be opening a real-money version of both its online casino and poker games within the week.

Shares leapt over 15 percent to $3.58, the latest surge in the company’s muted rally that has been taking place since last November.

Zynga’s shares are down almost 75 percent over the last year, but have gained just over 30 percent in 2013, as the company has moved to cut costs by shutting down underperforming games like CityVille 2, Mafia Wars 2, The Friend Game and Party Place, while debuting the sequel to the wildly popular Draw Something.

Draw Something 2 premiered in Apple's (AAPL) Swedish app store last week and is presently the 8th most downloaded free app. The company acquired the original version of the game through its purchase, a year ago, of the designer OMGPOP.

Additionally, Zynga has recently taken a major step away from its dependence on Facebook (FB), as of last week allowing users to login to games directly through a new and revamped website, though the option to use Facebook for gaming still exists.

That a 15+ percent jump in share price still does not push the stock over $4 is an indication of the difficulties the company still faces. While it has held its own in 2013, CEO Mark Pincus has watched as the executive talent flees from his company one after the next, the most recent case being Tuesday’s departure of former OMGPOP CEO Dan Porter.

The jump to real-money gambling through Zynga Poker and Zynga Casino in the UK later this week is an attempt to expand the company’s social media gaming model to a new pool of gamers, allowing it to tap in to a previously unexplored revenue stream.

[Image via Flickr]

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Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 115.40 0.30 0.26 25,070,364
AAPL Apple Inc. 109.90 0.41 0.37 26,527,997
RSO.P.A Resource Capital Corp. 8.50% Series A Cumulative R 23.03 -0.11 -0.48 1,481
ZNGA Zynga Inc. 2.86 -0.01 -0.35 5,178,557

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