Znyga Inc Losses of $435 million is this the ‘death knell’ for social betting or gaming?

Written by SBC Director on . Posted in NEWS, Social Betting, SOCIAL GAMING, Social Media

Znyga Inc announced on Tuesday losses that were reported at $435 million.

This had an immediate affect on the share price but has since recovered some of the intital downturn.

What does this mean for social gaming and the company signalling their interest in ‘traditional’ online gaming and gambling?

Znyga Inc Losses of $435 million is this the ‘death knell’ for social betting or gaming?

Zynga Inc for those that perhaps are unaware are the company behind the hugely successful and popular Zynga Poker, the largest poker site in the world with a mind boggling 35 million monthly active users, reported that they made $311.2 million over the final quarter of 2011.

They listed on the US NASDAQ exchange in December  and reported losses of $435 million.

In the same comparable financial quarter in 2010, before Zynga listed on the NASDAQ its earnings were around $43 million.

While everyone can say the losses are in whole or in part were related to the IPO, the statement by John Schappert, the Chief Operating Officer of Zynga Inc, was in part potentially to detract from the losses but raised a few eyebrows and know doubt some beads of sweat on the brows of ‘traditional online gaming companies’ that Zynga is interested in moving into other areas of online gaming and gambling.

With a war-chest in terms of the recent IPO, the business has indicated further by Mr. Schappert to move further into the gaming category this year, could mean they are on the acquistion trail or self-development of the platform are very interesting indeed given their intention to lessen the reliance on Facebook, and of course Facebook’s own plan to enter the regulated gaming markets for its platform and the potential for the US market to open up perhaps in the fall of this year – albeit a re-election year could be a major game changer if these two behemoths go head-2-head.

So SBC’ers – what  are your thoughts?

Is social gaming even though it has millions upon millions of players - a high volume low ARPU business model?

Will Zynga and Facebook go head-2-head and will the traditional online gaming companies be left to pick-up the loose chips at the gaming poker table?

Will a betting company offer a book (odds) on the outcome?

Or -

Will Zynga and Facebook start ‘buying’ other companies and therefore will we see a ‘second wave’ of M&A activity in order for everyone else to survive in the 3rd generation wave of online gaming?

We would love to hear your views.

Ras & Mark

Sportsbettingcommunity

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