Zynga Fielding Bids from Potential Real Money Gaming Partners
Gaming industry news site eGaming Review (EGR) reported Monday that social gaming firm Zynga has “opened a tender for a real money poker platform” with several online gaming developers. Amongst the possible partners are Playtech and Microgaming.
An “open tender” is a process in which qualified bidders compete for business via sealed bidding. Those bids are then revealed to the public upon which time a winner is chosen. Playtech, which operates the iPoker Network, the second largest network or room on the internet according to PokerScout.com, should be a strong player in the bidding. Microgaming ranks just outside the top ten, but has been one of the longest tenured online poker companies in the industry. GTECH G2, owner of the International Poker Network, and Intralot, a 20-year old e-gaming supplier, are also said to be in mix.
Zynga’s interest in real money gaming is not a new development. Back in January, Zynga confirmed as much to the website AllThingsD.com:
We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than 7 million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.
People best know Zynga for its social games on Facebook, such as Farmville, Words with Friends, Mafia Wars, and of particular interest in this case, Zynga Poker. The company’s games can also be accessed on Zynga.com, Google+, and mobile devices. The exact player numbers vary based on the source, but suffice to say, Zynga Poker is gigantic. According to PokerScout.com, which now tracks play money traffic in addition to real money traffic, Zynga Poker fields a seven day average of 123,600 play money cash game players. For comparison, PokerScout counts a seven day average of 49,269 real money cash game players on all poker rooms combined. The independent application metrics site AppData.com reports 7.5 million Daily Active Users and 35.2 million Monthly Active Users for Zynga Poker across all platforms.
Zynga is set to report its quarterly financial results this afternoon. The company is expected to report a 24 percent gain in revenues for the second quarter versus the same period last year. The question for Zynga, which is tied closely to Facebook, is what affect the results will have on its stock. It IPO’ed in December at $10 per share but has fallen to half that, sinking as low as $4.45 at one point. In a June Bloomberg article, Facebook said that its revenue had been hurt by users jumping on the site via mobile devices, rather than personal computers. The company derives the vast majority of its revenue from personal computer access.
That shift towards handheld devices like smartphones, in turn, has harmed Zynga. In that same article, Cowen analyst Doug Creutz said, “Consumer preferences may be switching decisively to mobile games given that quality is similar, if not better, and mobile games have the added advantage of being playable at any time, anywhere.”
Zynga stock is currently up 17 cents to $5.08 ahead of the earnings report.
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