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Facebook Inc (FB) & Why Zynga Inc (ZNGA)’s Real Money Gambling Could Be a Pipe Dream

So, Don Mattrick was supposedly lured to Zynga Inc (NASDAQ:ZNGA) by a hefty $50 million pay package; an amount that could soar in the event he executes the much needed turnaround. Amid the excitement over the pay, discussions on Mattrick’s prospects continue to take shape. Going by Mattrick’s success with timeless game titles like Need For Speed and FIFA, expectations are brimming and the market at large feels that he can turnaround Zynga Inc (NASDAQ:ZNGA).


However, in it all, the real headline behind Don Mattrick’s hiring has not been given that much attention. Don Mattrick’s hiring is perhaps the best signal that Zynga’s real money gambling stance is a pipedream or at best, a temporary solution.

Don Mattrick is not a gambler

When it comes to delivering gaming experience for users, Don Mattrick scores a straight ten out of ten. If this gaming genius, however, attempts to spend a day in the Las Vegas Strip, he might not do well. Don Mattrick is not a gambler; period. He has no experience to leverage when it comes to real money gambling. Does this mean that Zynga Inc (NASDAQ:ZNGA) made an awfully bad pick? Not at all; if anything, Zynga reminded everyone that it is a gaming company, not a gambling company.

Apart from a large percentage of Zynga’s online poker players being below 18 years, it really has no experience, or reputation for that matter, to leverage against heavyweights like Caesars Entertainment. Zynga’s real money fantasy seems to have caught on, though not that much, in the U.K. In the U.S. however, the segment is strewn with pitfalls. From fierce competition from brick and mortar heavyweights in Las Vegas, to a largely unregulated online gambling frontier, there seems to be no viable entry point into this market.

With this in mind, what does Zynga Inc (NASDAQ:ZNGA) hope to achieve from the online gambling craze? Zynga is using online gambling as a distraction. With investors’ attention shifted away from the core business, Zynga can peacefully push through with its turnaround efforts. Alternatively, Zynga Inc (NASDAQ:ZNGA) could be looking to secure a small segment of the online gambling market; not for huge profits, but to remain afloat. It could use the proceeds from gambling to maintain liquidity in view of a widely uncertain gaming market.

Mattrick and team do the heavy lifting

While investors try to work around real money gambling and what it presents, Mattrick will be doing what he was brought in to do; turnaround the gaming business.

Despite coming from an entirely different segment in gaming, Zynga Inc (NASDAQ:ZNGA) chose Mattrick for one simple reason — gaming is all about gaming experience. The common denominator in hardcore, mid-core, mobile and even social gaming is gaming experience.

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