Ahead of the Bell: Zynga shares climb
NEW YORK (AP) — Shares of Zynga Inc. rose in premarket trading as the online game maker said that two casino games would debut in the United Kingdom Wednesday.
But a Jefferies analyst cautioned that the new offerings could have a minimal financial impact on the company for now. Analyst Brian Pitz noted that the two games are only for the U.K. — a small market for Zynga — and only online, not on key Facebook or mobile platforms.
The maker of FarmVille and other games said Tuesday that it looks forward to launching casino games for players on Facebook and mobile platforms in the U.K. later this year.
Pitz has a "Hold" rating on Zynga.
Zynga's games are mostly played on Facebook. Revenues have declined with the popularity of its games, and Zynga has been working to establish its independence and is looking for new sources of revenue. Hopes that the company could also soon offer gambling in the U.S. have lifted its shares in 2013.
No one international company makes up more than 10 percent of Zynga's revenue, and Zynga's website is a tiny revenue driver, Pitz said. Still, he said he will watch what happens with the new U.K. casino games, ZyngaPlusPoker and ZyngaPlusCasino, since Zynga could bring real-money gaming to the U.S. if poker is legalized nationally.
"We continue to believe the primary focus is to prepare Zynga for the potential legalization of online poker in the U.S.," he said.
Shares of Zynga gained 10 percent to $3.38 in premarket trading. The stock has ranged from $2.09 in November to $12.70 last spring over the past 12 months.