In its lackluster second-quarter report today, at the very bottom of its press release, Zynga made a very important strategic announcement, saying that it would not pursue real-money gaming in the U.S.
It added that it would continue to evaluate its tests of such gaming products in the United Kingdom, where betting is legal. U.S. online gaming, in comparison, requires Zynga and others to jump a series of long-term and difficult hurdles.
While some investors had been counting on the potentially lucrative online business to be a potential growth area for the troubled San Francisco online social gaming company, management said it has decided to focus on fixing its core business instead.
Said Zynga in a statement:
“Zynga believes its biggest opportunity is to focus on free to play social games. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.”
No surprise, given this surprise, Zynga’s stock is off 14 percent so far in after-hours trading.