Zynga Eyes Online Poker After Stock Plummets

Zynga Inc. (ZNGA) stock plummeted by roughly 40 percent on Wednesday following a reporting of its weak quarterly earnings.

The company, which offered its initial public offering in December and saw stocks sold as high as $15.91 a share, closed the day at $5.08, and fell to as low as $2.93 a share after the market closed and the news broke.

Zynga did report revenue of $332 million in the second quarter, only slightly behind expectations of $343 million, but a revised yearly forecast to $1.15 billion, from $1.47 billion, caused the stock price to fall drastically.

The culprit seems to be a declining database of players who are willing to pay for their games. The company acquired the popular “Draw Something” game, expanding their overall player pool, but existing games such as “FarmVille” and “CityVille” lost their appeal with users.

The company placed some of the blame on Facebook, which has made changes to their site and made it harder for Zynga to attract new players.

According to Chief Operating Officer John Schappert, however, a foray into the world of real-money online poker, bingo and slots could become Zynga’s savior.

“We are actively pursuing the development of a product in real-money gaming,” Schappert said. “It is not for the U.S. — it is for international.”

Schappert clarified his company’s new direction on the Zynga conference call, stating, “We are developing a new growth opportunity in real money gaming that builds on our strong casino presence with Zynga Poker, the world’s largest free poker game and our new hits, Bingo and Slots. We expect to launch our first real money gaming products in international markets in the first half of 2013 subject to licensing approvals.”

Though the company has stated that it will focus on the overseas gambling market, there is no doubt that it will keep their eyes on developments in both Nevada and Delaware, the first two states to legalize online poker.

Zynga boasts an overall player pool of over 250 million, 125,000 of which play on Zynga Poker, roughly five times that of PokerStars.

A few days ago, eGaming Review published a story reporting that GTECH G2 and Playtech had submitted bids to provide Zynga with an online poker platform.

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