Zynga Closes UK Real-Money Arm: Why and What Next?
American based games developer Zynga Games – best known for its extensive array of free-to-play social gaming products – has announced that it will be withdrawing from its UK facing real-money enterprise, ZyngaPlus. The venture which it ran in partnership with Bwin.party offered both an online and mobile casino, and a slightly more popular poker product.
ZyngaPlus players were this week emailed and informed that their accounts would shortly be closed, and that they should withdraw any money still in their accounts. This comes ahead of the company’s planned withdrawal from the UK real-money gaming industry, and indeed the entire real-money gaming industry worldwide.
What is (was) ZyngaPlus?
Zynga’s name is synonymous with social gaming. Since its launch in 2007, Zynga has been developing social games and apps which caught players’ imaginations through their association with Facebook and other social media platforms. At the end of 2012, the company announced its partnership with Bwin.party (the company behind Party Poker), and their intention to launch a suite of real money games including a state of the art poker game.
Hopes for the new games were high. For Zynga Poker particularly, players and commentators alike were excited to see how effectively Zynga would tie in elements of social gaming to real money play. A platform which allowed big wins and friendly fun was promised, and to some extent was delivered, but this week’s news demonstrates that not all was as dandy as it seems.
What’s gone wrong?
It seems like a number of factors have contributed to the demise of ZyngaPlus. Firstly, despite a flurry of initial interest in the products, as well as various positive reviews, none of the games – even the admittedly decent poker game – every managed to fulfil its potential in terms of player numbers and revenue. It seems like too few people could take the company built on the back of social gaming as a serious real-money player.
On top of this issue came the fact that Zynga’s original popularity came from its innovation a novelty; as more companies moved into the social gaming scene, and developed real money games which borrowed its features, Zynga no longer stood head and shoulders above the others, and slowly players stopped being wowed by it.
I suppose one final reason we might attribute to ZyngaPlus’s downfall is our old friend the Place of Consumption Tax – the unfriendly foe who influenced William Hill to attempt to buy 888, and has made Party Poker rethink its rakes and guaranteed prize pots. Zynga originally chose to launch its real-money operations in the UK due to its relatively low level of regulation, and the ability to go largely untaxed. With the introduction of the PoC Tax, operating costs will have rocketed, and the narrow profit margins on underperforming games will have been squeezed even further.
What’s the future?
The question now is: how will Zynga collect itself up after this fall? While a spokesperson for Zynga has indicated that this withdrawal doesn’t necessarily mean the end of the company’s partnership with Bwin.party, given that the UK based firm sold of its own social gaming arm in January, it seems now like the two have very little to do with each other.
It seems most likely that Zynga will go back to doing what it does best: creating popular social games which appeal to a broad audience. The biggest criticism of Zynga has always been its inability to diversity (a point proven by its failure to make a go of real-money gaming); it might, then, be time for it to go back to the drawing board and come up with some new ideas for the next evolution of social gaming.
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