Zynga's US Online Gambling Bid Withdrawn

Published Wednesday, October 02, 2013 - Online-Casinos.com
Zynga's US Online Gambling Bid Withdrawn

The online gambling business has turned a corner with the introduction of social media gaming. The potential size of the market is enormous and many consider the opportunity to offer online gambling for real money on social networks something worth pursuing.

Facebook and Zynga, the mobile social game developer parted ways a little while ago and Zynga has lost 61% of its value but some consider it is still too expensive. ZNGA is competing in an immature market where the barriers to entry are almost nonexistent and brand loyalty is a foreign concept. Saddled with hidden problems in its financial house the company has once again made a crucial decision in regards to the market in the USA.

The company has made a formal withdrawal of its license application for an interactive gaming license in the state of Nevada. Zynga’s management finally realized they cannot rely on brand loyalty or build long-term franchises in the fickle world of mobile gaming.

The requirement to constantly produce original games to keep in the gaming loop without any guarantee the games will see success. The newest kid on the block mobile developer King and its game Candy Crush Saga is the top grossing game on Facebook. Everyone knows that Zynga is not currently making money and the decision to pull away from the US market may be a prudent one.

Analyst’ revenue projections for Zynga in 2013 and 2014, are very bleak so investors should be cautious when looking at the current price that is extremely low compared to the original IPO but have gone up 60 percent in the last year.

Factors leading to the withdrawal from the American market in Nevada are just a few compared to the creative financial position the company has presented. Value is determined by the market conditions with some companies stuck in old ways with old business models that in new situations just don’t cut it.

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