Social and casual game-maker Zynga
A strategic agreement between Zynga and American Express is definitely a game-changer, but not necessarily for the game-maker. This comes at a time when Zynga needs a lift more than ever. The digital gaming company has had a tough time holding onto gains since its December stock market debut. In fact, shares hit a new 52-week low of $6.36 on Monday after being strangled by investor fears over the company's ability to keep growing revenue.
While the new deal can't hurt Zynga, there's certainly more upside for American Express, as it will help increase its customer base. Of course, this isn't the card company's first play date with Zynga. In 2010, AmEx let Zynga fans cash in Membership Rewards points for virtual gifts and game cards that could be used across six of Zynga's popular social games.
Under the new agreement, cardholders will need to spend more than $25 on the first five purchases to reap the in-game cash for Zynga's FarmVille title. With 4.5 million unique daily users, FarmVille provides an ideal platform for AmEx to attract new members and Zynga to incentivize brand loyalty among its users. Zynga said it plans to expand the rewards program in the future to include other games such as CastleVille and CityVille.
While this is a step in the right direction, Zynga needs to pull off many more deals like this if it wants to keep gamers coming back for more. Track these social media-related stocks by adding them to My Watchlist -- The Motley Fool's free tool that lets you track and monitor your favorite stocks.
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