Zynga drops after scrapping online gambling plans

NEW YORK (AP) - Zynga investors cashed in their shares Friday after the company said it was dropping its plans to pursue online casino-style games in the U.S.

THE SPARK: The San Francisco company said late Thursday that it was no longer seeking the U.S. gambling license it would need to move into casino-style games, which are played for real money. The company still plans to test a gambling product in the United Kingdom.

Zynga posted second-quarter earnings late Thursday and reported that it had trimmed its losses. The company has been cutting staff to reduce costs.

THE BIG PICTURE: Adding online gambling could have given Zynga a potentially large source of revenue that the company badly needs.

When Zynga went public late 2011, its games, such as "Farmville" and "Mafia Wars," were the most popular on Facebook. Things have changed since then. King.com, the maker of "Candy Crush Saga," has unseated Zynga as the top social games maker.

The second-quarter results were Zynga's last under the direction of founder and CEO Mark Pincus. The company brought aboard former Microsoft executive Don Mattrick as CEO , who ran the Xbox video game business.

THE ANALYSIS: Mattrick is well-regarded in tech circles and there is some optimism in his ability to turn Zynga's fortunes around.

Wedbush analyst Michael Pachter sees changes within Mattrick's first 180 days at the company. "We believe Mr. Mattrick will act swiftly to focus on a handful of new initiatives and to right-size Zynga's staffing levels," Pachter wrote.

Zynga did not immediately respond to an emailed request for comment.

SHARE ACTION: Zynga Inc., fell 60 cents, or 17 percent, to $2.90 in morning trading Friday. That's near its 52-week low of $2.09 reached in November. The stock is down 71 percent since its initial public offering in December 2011.


(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Top Stories

  • 'Boondoggle'
    Seattle's beleaguered tunnel project earns a spot atop a list of 11 'highway boondoggles'

  • Crime on the Hill
    A vibrant Seattle neighborhood is the focus of increased efforts to combat a spike in crime

  • Prost!
    10 people you can't escape at Oktoberfest
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Listen to the show
Hear GeekWire on KIRO Radio
Join Todd Bishop and John Cook weekends on KIRO Radio to talk Seattle technology.

Sign up for breaking news e-mail alerts from MyNorthwest.com
In the community
Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.