Please ensure Javascript is enabled for purposes of website accessibility

Forget Gambling: Zynga Has a New Hit

By Rick Munarriz - Apr 3, 2013 at 6:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

"What's the Phrase" is gaining in popularity just as Zynga introduces real-money gaming overseas.

Shares of Zynga (ZNGA -2.04%) popped 11% higher this morning, and it's easy to see why. Months after announcing a partnership for real-money gambling in the U.K. with Bwin -- a company with licenses to operate real-money gaming websites overseas -- the first games are hitting the market.

ZyngaPlusPoker and ZyngaPlusCasino will let gamblers wager real money in the virtual casino. It's obvious what ZyngaPlusPoker offers, while ZyngaPlusCasino offers blackjack, slots, and roulette.

However, lost in today's buzz about how a FarmVille-themed online slot machine can turn Zynga's fortunes around, the company's bread-and-butter social-gaming business has another hit on its hands.

What's the Phrase is currently the eighth most popular free app download for iOS devices. It's not topping the chart the way earlier Zynga apps did, including Words With Friends and Draw Something, but give it time. What's the Phrase has been out for only a little more than a month.

Just as Words With Friends ripped off Scrabble and Draw Something is a Pictionary clone, What's the Phrase is a Wheel of Fortune knockoff. It has the same viral flavor as earlier Zynga releases, where a player can tap Facebook (FB -8.80%) to find other friends who are playing. The two-player game can also be played with an assigned stranger.

It remains to be seen if the game will grow enough to move the needle, but it's another reminder that Zynga isn't going away.

Zynga and Facebook seemed joined at the hip as the two companies raced to go public. Zynga stock crashed once bookings began to slip and executives began to bolt. The exodus hasn't eased. The CEO of Draw Something parent OMGPOP left Zynga this week. Facebook bounced back as its mobile prospects improved.

However, Zynga is still a force on Facebook. According to traffic tracker AppData, Zynga still draws 232.5 million monthly average users to its collection of games. That's twice as many players as the second most popular developer on Facebook's platform.

Still, analysts aren't impressed. They see Zynga reverting a deficit this year on a 16% drop in revenue. A single new game isn't likely to reverse those trends, but they should be baby steps in the right direction.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zynga Inc. Stock Quote
Zynga Inc.
ZNGA
$8.18 (-2.04%) $0.17
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
FB
$178.97 (-8.80%) $-17.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.