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Category Archives: Zynga
Betable Forms Partnerships to Compete with Zynga
Betable Ltd has reached agreements with three social-gaming companies that will uses its platform to directly compete with Zynga’s entry into the ring. Bloomberg has full coverage of the story.
Slingo Inc, which is a maker of virtual slots and bingo titles, will use Betable’s shiny new U.K. gambling license and technology for future games. Slingo attracts roughly 54 million users every single month. The other companies that have partnered up with Betable are Digital Chocolate Inc and Murka Ltd.
Digital Chocolate was started by Electronic Arts, Inc. and Murka is the maker of the popular game “Slots Journey.”
Last week, Zynga formed a partnership with bwin.party to launch U.K. real-money gambling. But Betable was first on the scene with its partnership with Big Fish Games, which recently launched its first real-money gambling game. They’re interested in pressing that homefield advantage. Betable believes it can streamline the licensing and offer developers a framework to instantly get things running on social networks.
Betable’s new partner Slingo believes that the development of online operations will benefit he company. “Our goal would be to transition online players into gamblers of our content,” Slingo CEO Rich Roberts said in an interview with Bloomberg. “Betable gives us an opportunity to move a little bit quicker than we could on our own.”
Online gambling has been legal in the U.K. since 2005, and has reached a market value of over $2 billion.
The Staggering Growth of Online Gambling
On this lovely Friday afternoon, Chipist is giving you some weekend homework. Your assignment is to study the numbers in the below infographic and remind yourself of exactly what kind of industry the world of online gambling represents. Created by the folks over at Poker Sites, the graphic states that in a sense, the growth of online gambling has actually surpassed social media itself.
There was a 32 percent increase in online gambling in just a single year. One year saw an entire third more people get into the game. Social media only saw a 4.5 percent growth. Now, you’ll need to take that with a grain of salt. Social media already has a titanic number of users, so a 4.5 percent yearly increase still constitutes a significant number of people. But it’s exciting to see that online gambling grew by such a huge margin as well.
The graphic also takes a look at the U.S. market. We already know the U.K. market is thriving, but we’re more interested in our own shores. Coming in at 63 percent, lottery play is the most popular online gambling activity. I’m wondering what kind of numbers we’d see if online poker was regulated by the federal government?
Click the infographic for a full view.
Click for full resolution.
Zynga Makes First Move Toward Real-Money Gambling
Just because Zynga didn’t purchase the OnGame Network doesn’t mean it didn’t have a trick up its sleeve. Today the company announced an exclusive partnership with bwin.party that marks the company’s first move into the holy grail of real-money social gambling. At the moment, the plans seem to suggest that the real-money operations will only occur in the United Kingdom, which falls in line with industry predictions that Zynga would not announce such a plan for U.S. customers.
This is pretty big news, and it will be exciting to see how this announcement impact investor reception of Zynga’s third quarter results. Just yesterday, Zynga axed a whole bunch of folks, and this announcement is feeling like a bit of a bounceback.
It’s worth posting the company’s press release in its entirety because this is a historic industry development. Check back later for more news.
SAN FRANCISCO, Oct. 24, 2012 (GLOBE NEWSWIRE) — Zynga (Nasdaq:ZNGA), the world’s leading provider of social game services, and bwin.party, the leading international real money gaming operator, today announced an exclusive partnership to offer real money online Poker and Casino games in the UK market. Zynga’s UK-based RMG service and bwin.party will launch RMG products including Poker and a full suite of 180 Casino games in the first half of 2013, which include table games such as slots, roulette and blackjack.
“Bringing together Zynga’s expertise in social gaming with the top international real money gaming operator is the best way to create the highest quality gaming experiences for our players in the UK,” said Barry Cottle, Executive Vice President, Corporate and Business Development, Zynga. “Partnering with an established leader like bwin.party is a strategic and prudent way for us to enter a key RMG market while giving local players the real money games they’ve been asking us for.”
“Today’s announcement is another example of our success in leveraging our assets through strategic blue-chip partners,” said Jim Ryan and Norbert Teufelberger, Co-CEOs of bwin.party. “Zynga is the world’s leader in social games with hundreds of millions of active players worldwide and a significant player base in the UK. We are delighted to have been selected as their chosen partner for this important step in their evolution, and hope to expand our relationship into other products and markets.”
Zynga’s real money UK poker customers will join the bwin.party dotcom player liquidity pool — getting the benefits of playing on the largest regulated poker network. Zynga’s UK-based RMG service will be powered by the established operating platform, software, and related support of bwin.party.
In addition to the full suite of Casino and Poker games, Zynga’s UK-based RMG service will also leverage the company’s world renowned entertainment brand, FarmVille, to offer local players the first-ever, online FarmVille-branded real money slots game.
Zynga’s UK-based RMG service will operate under bwin.party’s Gibraltar gaming license.
Zynga Cuts 100+ Employees, Closes Boston Office
Over 100 Zynga employees just lost their jobs. The grim occasion happened during today’s highly publicized Apple event, leading to speculation that Zynga intended to hide the firings to avoid bad press.
TechCrunch confirmed that the Boston office has been shut down and two thirds of the employees in the Austin office have been let go. Additional cuts were made to the teams who manage The Ville and Bingo games on Facebook.
Justin Maxwell, a former Apple, Sony, Mint and Smule employee was first on the Twitter scene earlier today, tweeting:
Earlier in the month, Zynga reduced its earnings and revenue projections for the coming year, leading to a stock plummet. CEO Mark Pincus said that there would be “targeted cost reductions” which is just business-speak for “we’re gonna fire some folks.” Kind of like how the phrase “tactical withdrawal” means “run the hell away, right now.” As TechCrunch wrote:
“So while the pink slips may have been expected, their announcement during the Apple iPad Mini event most of the tech world was watching makes it seem like Zynga was trying to minimize the fallout of the cuts. That clearly didn’t work.”
Some have speculated that Zynga’s movements toward online gambling indicate a breathe of life in the ailing company. But as blogger Chris Grove pointed out, Pincus is likely not going to announce any kind of real-money gambling platform at tomorrow’s quarterly earnings call.
OSGA Examines the Attraction to Social Gambling
In a session at the G2E Global Gaming Expo titled “Social Games: Soaring Technology,” guest speakers pointed out how social media gaming is a fluid way of introducing customers to free games which could then transition into real-money games.
This holds true for social media sites and land-based casinos. As Hartley Henderson writes for OSGA,
“Right now real money online gambling is illegal in the U.S., but if the casinos can get players to play for free on social media sites then when any laws prohibiting online gambling are amended or repealed these casinos need simply to “flip a switch” and the casinos have hundreds of thousands of potential players for their real site.”
Henderson writes about the curious allure of social media gambling, and how 120,000 players flock to Zynga Poker on any given day. This is almost 2.5 times the amount of all other real money poker sites. You’ve got thousands of players participating, many of whom are paying small-time cash for virtual chips.
I’m not going to bother trying to figure out how process isn’t actually real-money gambling. I don’t see myself understanding how exchanging how actual money for virtual money … and then gambling it isn’t a form of actual, no-BS online gambling. Perhaps it is? Perhaps there are hardened folks in Congress who view it as such and wish it outlawed? I don’t really know.
Anyways, Henderson’s article about the attractiveness of social media gambling offers great insight into this topic. Required reading for anyone interested in this industry. Head over to OSGA and check it out. As he concludes:
“It certainly isn’t for everybody and personally I couldn’t fathom playing any gambling game without a vested interest but as most marketing departments would suggest, the customer is always right. And in the case of our cab driver, if he prefers to spend time and money on Zynga rather than at a Las Vegas casino who are we to question it?”
Will Zynga Unveil Real-Money Gambling in the U.S.? Odds Don’t Look Good
Zynga CEO Mark Pincus
OnlinePokerReport has a prediction. Zynga’s CEO Mark Pincus isn’t going to unveil any kind of real-money online gambling plan at the October 24 quarterly earnings call. Blogger Chris Grove writes that the U.S. market simply isn’t strong enough yet to warrant such a move. Delaware and Nevada are pushing ahead toward state regulated online gambling, but that’s just not enough at this time. And international markets?
“The first problem Zynga faces getting ‘GambleVille’ off the ground is the lack of a viable target market for real-money gambling in the status quo. The European market is so competitive that IGT recently up and walked away from Entraction, a poker network that it paid over $100 million for only a year ago. Emerging markets such as South America and Asia present substantial regulatory and legal challenges that are anathema to a publicly traded company like Zynga.”
But as Grove argues, the primary challenge Zynga faces is not just the tenuous nature of online gambling in the U.S. but rather the changing face of casual online gambling, which caused the total number of active players in Zynga titles to drop precipitously last year. Grove concludes:
“It is this cocktail of political uncertainty, internal confusion and more pressing priorities that will leave Pincus unable to lay out a path that Zynga can follow to real-money gambling prominence and profits in the quarter ahead.”
October 24 is coming up soon. Perhaps Pincus will surprise us all?
Zynga Poker Loses Main Man
Laurence Toney
I love how LinkedIn is often used to conduct a kind of corporate espionage. Mashable reported today that a gentlemen named Laurence Toney took a new job at a Los Angeles-based startup accelerator. While I’m sure they’re very happy that Mr. Toney switched careers, what they were most interested in is the company he listed as his former employer: Zynga.
And why is the news of Mr. Toney’s career decision appearing on Chipist? Because Toney was Zynga’s go-to man for their hugely popular online poker game, Zynga Poker. For a company targeting the online gambling industry as a possible way out of their financial troubles, this likely comes as frustrating news to Zynga.
Toney managed Zynga Poker for two years, which turned into the world’s largest free-to-play online poker game.
Mashable also reported that Toney’s departure follows a pattern:
“Toney is the latest in a string of top-level executives to leave Zynga. Chief technology officer Allan Leinwand, as well as chief marketing and revenue officer Jeff Karp resigned last month. In August, chief operating officer John Schappert and chief creative officer Mike Verdu left the company to found his own firm.”
But, they still have the lovely Maytal Ginzburg on their side, a gambling website veteran and poker guru the company hired near the end of August. Perhaps Toney’s departure isn’t so bad for the company. Perhaps they’ll still rock some serious online gambling industry moves?
Forbes Reports on the Link Between eSports and Online Gambling
Forbes posted an excellent article written by Alan McGlade and Corey Wade about how online gambling and eSports gaming—Starcraft, League of Legends, etc.—are proverbially joined at the hip.
“Receiving a cash prize for winning a StarCraft II competition is legal at the federal level in the United States and, depending on the structure of competition, legal in up to 48 states since it is considered a ‘game of skill’. Playing online poker for real money, a ‘game of chance’ in the eyes of the law despite the skill involved, has traditionally been illegal in North America.”
But things are changing. As California and New Jersey (and also Iowa, I think) seek to join Nevada and Delaware in allowing online gambling, companies are starting to view the explosion of eSports gaming and Facebook gaming as a sign that online gambling is next.
As Forbes reported, more 18-24 year-old males watched Major League Gaming’s Spring Championship this year than the Rose Bowl and Zynga’s Texas HoldEm Poker game is exploding in popularity on Facebook.
“The only thing Facebook users like almost as much as Facebook itself is a poker game app developed by Zynga that doesn’t even involve real cash.”
Zynga and other companies are making movements toward online gambling, hoping to turn those slews of pretend-money players into real-money players. With total online gambling revenues for 2011 reaching $30 billion, it’s no wonder that companies are eyeing eSports players as potential customers.
bwin.party and Nordeus to Produce New Sports Betting App
We require more sports betting apps. Plenty more. The online gambling outfit bwin.party is partnering up with game developer Nordeus to give us what we want.
The new sports app in development comes after bwin.party’s announcement of committing $50 million toward social game development, which included the establishment of a European game studio branch. Details aren’t yet available about the new title, but it’s certainly on its way.
The game developer bwin.party chose is Nordeus, the developer behind the Top Eleven soccer—ahem, football—management game which has been steadily growing on Facebook and frequently appears on InsideSocialGames’ list of Top 25 Facebook Games.
It will be exciting to see what kind of game bwin.party and Nordeus produce, especially with Zynga and RocketPlay’s new entry Sports Casino growing in popularity. Can this mystery game go toe-to-toe with the these two big players?
Gamasutra Comments on Zynga’s Next Move
At the end of last month we reported on Zynga’s hiring of Maytal Ginzburg to fill the position of COO. Ginzburg, an online gambling veteran, will assume the role recently vacated by John Schappert.
Chris Morris of Gamasutra wrote about “Zyngas biggest gamble yet” and commented,
“Will Ginzburg be able to staunch the bleed? Probably not. Zynga execs are at the top of every headhunter’s wish list—and they generally seem ready, if not eager, to leave. But the bigger question is: Can she turn things around? And that’s a little harder to answer.
Ginzburg, as has been widely reported, was most recently senior VP of regulated markets at 888 Holdings, an online gambling firm. And that could be worth something as Zynga works to reinvent itself these days.
That metamorphosis could begin early next year with the release of a real-money version of Zynga Poker, slated to hit the U.K. in 2013. The gambling market is a crowded one, filled with established players. But Ginzburg’s hiring could help even the odds a bit.”
The article goes on to mention the still-illegal nature of online gambling in the majority of states, pointing out that Nevada is the only one where online poker has been truly authorized. But even with that large obstacle in the way, there is still plenty of profit available for the taking.
… the Department of Justice, after years of saying otherwise, announced last December that the law prohibiting online gambling only encompassed sports wagering. Legal experts said that opened the door for individual states to allow online poker and the like, with the caveat that the games don’t cross state lines.
Financially, that’s like honey to a bear for a company like Zynga. Before a recent crackdown by officials, online gambling was a market with $18 billion in wagers in 2010.
Ginzburg’s hiring indicates Zynga believes that market is about to open up further — without the legal headaches that have historically come with it. And it’s positioning itself to be a first mover in the field.
But what happens if the regulations surrounding online gambling are not lessened? What if the U.S. government sticks to its guns and continues to ban the practice? Will Zynga still be able to get some mileage out of Ginzburg’s hiring?
