Can Zynga Cash In on These Patents?

Mark Pincus ZyngaIn recent months, Zynga (NASDAQ:ZNGA) appears to have made huge strides to leave its Facebook-dependent, casual-game based past behind it, and with good reason; the dwindling number of monthly active users have pulled its stock price down from its 52-week high of $15.91 and caused operating losses in the past four consecutive quarters.

Zynga, which once provided 12 percent of Facebook’s (NASDAQ:FB) total revenue, began to shift away from the social network in November, when the two companies signed a new contract that allowed the game provider to unshackle its game platform Zynga.com from Facebook. But with the users losing interest in its games by the thousands, that platform is no longer its endgame; the company is now focused on real-money gambling.

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A report issued by Envision IP, an intellectual property research firm, noted that Zynga has been steadily amassing patents ahead of the launch of its United Kingdom-based online gambling platform, with a particular focus on those related to casino gambling and gambling technologies. When Facebook went public last May, Envision analyzed the holdings several social networking companies, including Zynga. At the time, the company had only one U.S. patent and only 9 published patent applications. Over the last year, the company has increased that number to 89 patents and 36 pending patent applications.

In particular, Zynga acquired 38 patents from Walker Digital, of which 33 are related to gambling. They cover software that facilitates multi-player casino-style gaming and processes bets and payouts.

Internet gambling in the U.K is not the only new gaming plans on Zynga’s horizon. As The Wall Street Journal reported on December 5, the company filed preparatory paperwork with the Nevada Gaming Control Board to offer real-money gambling in the United States. Currently Zynga’s gambling games, like “Zynga Poker” allows players to buy in with real money, but they can only cash out in virtual currency.

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