Success, however, won’t come easy in the social gaming market — even if Facebook’s core-gaming undertaking pans out. Zynga has a meaningful advantage as the market’s largest publisher. Electronic Arts Inc. management must agree; it has lost considerable high-level talent to Zynga, including the company’s COO, its executive VP of Electronic Arts Inc. Play, and its executive VP of Electronic Arts Inc. interactive.
Should Zynga be worried?
All parties seem to benefit from a trend toward core gaming — except Zynga. Even though it boasts a roster of 232 million average monthly active users, the company still lacks meaningful traction in console-like gaming. Furthermore, Zynga remains unable to generate any free cash flow, a snag that would place the company at a significant disadvantage should it need to develop games to compete with Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA) if they decide to pursue this market.
The biggest winner of the bunch is probably Facebook Inc. (NASDAQ:FB), who could benefit from new and loyal core gamers. Furthermore, there’s a good chance that core games will be higher-margin contributors to Facebook’s gaming segment than casual games.
The article Facebook’s Next Target? Core Gamers originally appeared on Fool.com.
Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Facebook. The Motley Fool owns shares of Activision Blizzard, Facebook, and Microsoft.
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