Zynga Fights Back, Says EA Copied Games

Zynga Fights Back, Says EA Copied Games

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In early August Electronic Arts filed a lawsuit against social gaming giant Zynga for its new Facebook game The Ville.

“The copying was so comprehensive that the two games are, to an uninitiated observer, largely indistinguishable,” said Lucy Bradshaw, general manager of Maxis (the EA subsidiary that produces all Sims games).

Zynga finally responded to the claim Friday, by accusing EA of copying Activision’s Little Computer People when it created The Sims to begin with. It also accused EA of copying Zynga.

“Zynga’s YoVille, released in 2008, three years before The Sims Social, was the first commercially viable life simulation game on Facebook, “ Zynga says in court papers filed Friday. “YoVille allowed players to: customize a virtual avatar by selecting its skin color, facial features, hair color, hair style, and clothing; decorate and arrange furniture within a virtual home; work a virtual job; and socialize with other players by visiting them and sending them virtual gifts. “

Zynga adds, “In other words, it was Activision — not EA — that first developed the ideas found in The Sims Social, and it was Zynga — not EA — that first brought the concept to Facebook.”

In a CNN interview in 2000, Sim’s creator Will Wright acknowledged playing Little Computer People, and receiving “valuable feedback” on the game from its creator Rich Gold.

Zynga claims that EA actualy copied it when it started making social games for Facebook, noting that EA’s SimCity Social was launched a year and a half after Zynga’s CityVille.

“A side-by-side comparison of Zynga’s CityVille and EA’s SimCity Social shows that EA draws heavily on elements found in Zynga’s CityVille game. In fact, in promoting its game, EA explicitly played on Zynga’s popular CityVille: ‘More City, Less Ville.’”

EA’s lawsuit against Zynga regarding The Ville isn’t the first time the company has been accused of copying games. The company often releases games that are exceptionally similar to other popular games on the market. FarmVille, for instance, was released after a similar game, Farm Town, took Facebook by storm.

The company acknowledged that tradition in Friday’s court filing.

“Zynga did not achieve its success in the social gaming sphere by launching games that users don’t want to play. It achieved its success by innovating in popular genres, a tradition it has continued with The Ville.”

What do you think? Is EA or Zynga in the right? Let us know your thoughts in the comments.

How Zynga Can Save Itself: Better Games, Not Gambling

How Zynga Can Save Itself: Better Games, Not Gambling

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Mashable OP-ED: This post reflects the opinions of the author and not necessarily those of Mashable as a publication.

For those of us who lived through the dotcom crash of 2000, plummeting tech stocks are nothing new. But I can’t remember ever seeing a company lose 40% of its value in just a few hours — and that’s what happened to Zynga Wednesday afternoon.

The online gaming giant’s share price, which once stood as high as $16, has been trading in the region of $5 recently — until it released its second quarter earnings report Wednesday, and the price wilted like an untended FarmVille crop to $3 in after-hours trading.

Investors, it seemed, had finally lost patience with Zynga founder and CEO Mark Pincus, and his vague explanations of how the company will continue to grow.

I can’t say I blame them. I like Pincus; I knew him back in the days when he founded a great little social network called Tribe, which plugged the gap between Friendster and Facebook. But I also saw him interviewed on stage at the Fortune Brainstorm Tech conference last week in Aspen; it was hardly a bravura performance.

Pincus spoke haltingly; he was much more precise in defining Zynga’s challenges (for one, the smartphone boom has created an environment where people spend less time in his games) than in identifying solutions (there isn’t even a rough launch date for a FarmVille mobile app). No wonder a cheeky Twitter executive tweeted Wednesday that Zynga engineers were always welcome to come interview at his company. (The tweet has since been deleted.)

Gaming vs. Gambling

So how can Zynga right itself? Where do the future revenue streams lie, in a world where people are simply playing less Draw Something, having fewer Words With Friends, and slowly stepping away from nearly all of the Villes?

As I see it, there are two main possibilities: legalized gambling on the one hand, and smarter, more compelling, more original games on the other.

Gambling — or real-money gaming, as Pincus calls it — is a potential solution the CEO returns to a little too loudly and a little too often. As he points out, Zynga is already home to the world’s largest poker game, its biggest slots and bingo enterprise. Why, all it would take is a change in the entire federal regulatory environment, and Zynga would be a virtual Caesar’s Palace, but one the size of the entire Strip!

Investors aren’t buying it. Zynga is no Vegas casino, no offshore operation. It’s a company firmly rooted in California, with nearly all its customer base in states where gambling is illegal. Pincus is hardly the CEO to talk multiple governments into making a change to gambling law that would hurt the casino lobby. (One wonders if even Steve Jobs could meet that challenge.)

The End of Following

That leaves better-written, more compelling, more original gameplay. I’m told by Zynga sources there is a movement in this direction already — but that it’s hard to change the culture of a company with a tendency to either buy its games outright or be heavily influenced by others in its creativity, to put it mildly. (I hear jaws dropped and heads shook all around the Zynga building when The Ville, a game not entirely unlike The Sims, was unveiled.)


Pincus is right to say, as he does, that games should be social, simple to pick up, effortless to start playing, and capable of being consumed on the go, in bite-sized chunks. Do that and your audience is almost limitless. I give Zynga a lot of credit for shaking up the stodgy old computer and videogame industry with this model.

But he’s wrong to believe, as much of the evidence suggests, that games should be dumbed-down clickfests and meaningless reward loops. The great thing about gaming, especially when it’s social, is that it lets our imaginations soar. It lets us have fun by playing someone else — and playing the role of someone else.

I would argue that some of Zynga’s most successful games have been its smartest — the ones that sneak in some self-improvement while you’re enjoying yourself in your downtime. The Scrabble-like Words With Friends bestows an appreciation of the English language; Draw Something hones artistic skills, however mildly; FarmVille teaches agriculture, of all things. None would look particularly out of place in the classroom next to fully educational games such as Oregon Trail.

More Fun, Less Marketing

That pleasure wears off fast, however, when those titles are stuffed full of ads for other games, overly-eager requests to hook you up with more players, and nudges towards virtual goods purchasing. (The first two, plus a poor and completely unnecessary redesign, are the reasons I’ve been able to shed my long-standing Words With Friends addiction in recent weeks.)

I’d much rather drop a few dollars on a great game than constantly be on my guard for commercial purpose within it. Wouldn’t you? In-app purchases need to be super subtle, obviously optional; the game environment needs to tease our minds rather than our wallets.

For instance, my wife is addicted to DragonVale, a Zynga-esque game by Backflip Studios about breeding dragons. Ask her why she keeps returning to it, and she’ll tell you about the thoroughly silly descriptions you get to read when you buy a new dragon. There was attention to detail in the writing, and it paid off.

Mobile is a vast new frontier for gaming; we don’t know half of what works yet. What we do know is that the world is getting smarter, to the tune of an IQ point a year on average.

Maybe millions of us are ready for Choose Your Own Adventure-style text quests with multiple players, or games where you compete to compose the catchiest tune on a simplified instrument, or a galaxy-wide empire-building god game you only get to play five minutes at a time. Who knows until we try?

I’d like to see Zynga throw a thousand wacky, creative ideas at the wall and see which ones stick. Stop trying so hard to make them all look the same. Iterate fast, fail fast, and win with something you never expected — rather than trying to provide a platform for other developers to win on.

With more than a billion dollars in the bank, the company can certainly afford to invest in good game design — and investors may buy that strategy more than the unlikely promise of legalized gambling.

Zynga Sues Former CityVille Head, Says He Stole Game Ideas

Zynga Sues Former CityVille Head, Says He Stole Game Ideas

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In the midst of a mass employee exodus, Zynga is suing the former head of its CityVille game for stealing its ideas.

The embattled online company filed a complaint in a San Francisco Court last Friday, accusing Alan Patmore of “misappropriation of trade secrets” and “breach of written contract.” Patmore, who was CityVille‘s general manager, joined Zynga last year. He recently left to be vice-president of product for competitor Kixeye, All Things D reports. As the number-one game on Facebook based on monthly average users, CityVille is among Zynga’s most popular games, according to its website.

“Zynga respects the rights of its employees to resign and seek employment with other companies. But what Zynga cannot tolerate is the wholesale theft of some of its most sensitive and commercially valuable data,” the company’s attorneys write. “Zynga has no choice but to bring this lawsuit to recover its stolen data and to ensure no use is made of it.”

The 14-page court document then goes on to accuse Patmore of taking 760 files from Zynga — including unreleased game design documents and confidential revenue information — and later attempting to “cover his tracks.”

Zynga also takes a jab at Kixeye, describing it as “a social gaming company that ranks 34th in the industry” and “who has publicly expressed animus towards industry-leader Zynga.”

The data that Zynga claims Patmore stole could give rivals such as Kixeye a competitive edge, the document says.

“[It] could be used to improve a competitor’s internal understanding and know-how of core game mechanics and monetization techniques, its execution, and ultimately its market standing to compete more effectively with Zynga.”

The San Francisco-based firm is no stranger to legal battles. In August, Electronic Arts sued Zynga over striking similarities between The Ville and EA’s The Sims Social.

Zynga and Kixeye did not immediately respond to requests for comment.

UPDATE: Kixeye tells Mashable that it “has nothing to do with the suit.”

“Unfortunately, this appears to be Zynga’s new employee retention strategy: Suing former employees to scare current employees into staying,” spokesman Bryan Lam says in an email. “They’ve clearly exhausted other options in their employee retention playbook.”

Read more: http://mashable.com/2012/10/16/zynga-sue-cityville/

Zynga Holiday Campaign Turns Virtual Goods Into Real-World Donations

Zynga Holiday Campaign Turns Virtual Goods Into Real-World Donations

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Zynga launched its first-ever holiday philanthropy campaign Wednesday, turning the virtual goods in its addictive games into real-world charitable gifts.

For as little as $1, customers can purchase an in-game good that will benefit Toys for Tots, as part of the “Oh, What Fun” campaign, which runs through Dec. 31. You can give while playing CityVille, CastleVille, Words With Friends, FrontierVille, Bubble Safari, Draw Something and FarmVille.

Although this is Zynga’s first holiday-specific campaign, the social-gaming company’s charitable goods have generated $13 million in donations to date, through 2.5 million in-game purchases.

Read more: http://mashable.com/2012/11/28/zynga-oh-what-fun/

Zynga's Executive Team Sees Massive Shakeup

Zynga’s Executive Team Sees Massive Shakeup

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Social gaming company Zynga announced several huge changes in its executive team Tuesday.

CFO David Wehner is leaving Zynga for a senior finance position at Facebook, and will be replaced by Mark Vranesh, who previously served as the company’s chief accounting officer. Vranesh previously served as CFO of Zynga from May 2008 to August 2010, when he assumed the position as the company’s chief accounting officer.

In addition, David Ko was appointed COO of Zynga, Barry Cottle was appointed chief revenue officer, and Steven Chiang was appointed president of games at the company. All three are making those moves from other positions inside the company.

“Dave remains a good friend to us all and we wish him success in his next role,” said Mark Pincus, founder and CEO of Zynga. “Mark, David, Barry and Steve are rooted in our culture, committed to our future and part of the talented bench of leadership at Zynga. I’m confident we have the right team to deliver on our mission of connecting the world through games and position us for long-term growth.”

The changes happen in the wake of company layoffs. In October, Zynga laid off more than 100 employees in its Austin office and announced it will be closing its Boston studios.

The company recently beat Q3 revenue estimates, posting revenues of $317 million for the quarter (beating estimates of $256 million).

“While the last several months have been challenging for us, Zynga remains well positioned to capitalize on the growth of social gaming,” Mark Pincus, CEO and founder, said in a press release last month announcing the quarterly results.

”We’re implementing a number of steps to drive long-term growth and profitability. The successful launches of ‘FarmVille 2’ and ‘ChefVille’ in the third quarter demonstrate that when we develop great games, our large player audience engages. It’s more clear than ever that along with search, shop and share, play is a fundamental pillar of the Internet, and Zynga continues to be the leader.”

Read more: http://mashable.com/2012/11/13/zyngas-executive-team/

What Does An Activist Hedge Fund Want With Zynga?

What Does An Activist Hedge Fund Want With Zynga?

Eminence Capital is known for buying stakes in companies with the intent of forcing a deal or change of control. But Zynga’s stock ownership structure makes the success of such a play unlikely. So what is Eminence up to? BF_STATIC.timequeue.push(function () { if (BF_STATIC.bf_test_mode) localStorage.setItem(‘posted_date’, 1409777469); }); BF_STATIC.timequeue.push(function () { document.getElementById(“update_posted_time_3436269”).innerHTML = “posted on ” + UI.dateFormat.get_formatted_date(1409777469); });

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Robert Galbraith / Reuters

Eminence Capital re-entered the activist investing world after a sever-year hiatus earlier this year and successfully forced a merger of Men’s Wearhouse and JoS. A. Bank, netting the hedge fund at least $14 million.

The $6 billion fund followed that up by announcing last month that it bought a nearly 10% stake in struggling World Wrestling Entertainment. And now, according to regulatory filings, Eminence has increased its stake in gaming company Zynga to 5.1% from the 3% stake it slowly began building in the third quarter of last year. The question is why?

Eminence’s moves with both the WWE and Zynga are curious because the two companies have dual class ownership structures that make an activist play difficult due to the voting power such a structure affords management.

At Zynga, for instance, control still largely rests with co-founder Mark Pincus, who wields 62% voting power despite the fact that his equity stake is less than 10%. (Pincus ranks as Zynga’s second largest shareholder behind Kleiner Perkins, which has 9.5% stake due to share class restructuring as of June).

Zynga, known for once-hot hit games like Farmville and Cityville, has undergone a massive restructuring over the last 18 months, including the decision by Pincus to step down from day-to-day operations less than a year after a new CEO took control. The company’s stock has been extremely volatile over the timeframe, going from a low of $2.50 per share to as high as $5.79 per share and back again to their current roughly $3 per share.

But maybe, instead of an activist play at Zynga, Eminence is looking to take advantage of the Twitch effect, a reference to Amazon’s recent $970 million purchase of the site that streams video of people playing video games. Prior to Amazon’s purchase few people outside of hardcore gamers and tech heads had ever heard of Twitch. Now Twitch is headline-worthy tech company.

Eminence could simply be playing the long game with Zynga, betting that its troubles combined with gaming industry consolidation could mean a big-name buyer may soon swoop in and send the stock skyrocketing into a big payday for the fund.

As for the WWE, no such deal potential is looming so its motives with that company are a little harder to decipher.

For its part, Eminence declined to comment for this story.

Read more: http://buzzfeed.com/mariahsummers/what-does-an-activist-hedge-fund-want-with-zynga

Mark Pincus’s Vanishing Act

Mark Pincus’s Vanishing Act

For the new Zynga to succeed, its founder Mark Pincus had to do something he’s never been able to do — let it go. While he was largely absent, he formally stepped back from the company’s day-to-day operations today.

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Jim Urquhart / Reuters

Mark Pincus is no magician, but over the last year Zynga’s notoriously micro-managing founder has pulled off a trick no one thought he was capable of: disappearing.

Today, the company said he would be stepping down from all day-to-day operations — though he would remain chairman of the company. “While I’ll still keep an office at Zynga, and be active in supporting the company, I will not have an operating role. Most importantly, I remain Zynga’s largest shareholder and biggest believer,” he wrote in an internal memo circulated to Zynga employees.

But according to interviews with four sources inside or close to Zynga, Pincus had already been largely absent from Zynga since his stepping back to become “chief product officer” of the company.

While questions swirled as to whether he would be able to let go of the company he founded, Pincus has seemingly broken character and receded into the background to allow Chief Executive Don Mattrick room to put his stamp on the gaming company, according to several sources familiar with his activities. Sources described Pincus as having “checked out” for most of Mattrick’s freshman year at the gaming company — the former Xbox head was hired in July last year, when Zynga was at arguably its lowest point, and Pincus stepped back back into a “chief product officer” position. Indeed, two sources said Pincus even symbolically divorced himself from Zynga by living in a vacation home in Aspen, Colorado for a spell.

Pincus’s newfound altruism has helped the company he founded and brought to prominence regain a toehold — if not its footing. Zynga still faces the macro challenge of restoring the massive player base it lost to more popular games played on mobile devices, but with Pincus on the sidelines, Mattrick has been able to re-orient the company through a series of personnel and strategy changes. Mattrick, for example, coordinated Zynga’s first major acquisition since the failure that was OMGPOP with the $527 million deal to buy NaturalMotion. Mattrick actually used a large chunk of what is observed to be Zynga’s biggest point of leverage — its more than one billion dollar cash pile, giving it plenty of runway to find new games that will return the company to prominence — in the acquisition.

Sources said Mattrick also swiftly axed superfluous projects and narrowed the company’s focus to a few core efforts that include leveraging its existing games, finding new intellectual property, and exploring the potential of its somewhat meandering gaming network, which since launch hasn’t gained a strong amount of traction beyond a small slice of Zynga players due to it being “over-engineered” and not very user-friendly.

Taken together, sources said that internally a sense of optimism has actually returned to Zynga. “There’s been more certainty in the past six months than there has been in the past five years,” one source said. “For once, we have a plan for 2014, and we’re following through with it. It isn’t changing every quarter. We’re already thinking about 2015 and 2016.”

Shareholders, too, seem to be pleased with the company’s new direction.

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As Zynga continues its shift to a bona fide gaming company under the more creatively-focused Mattrick, Pincus’s analytical savvy, which helped propel Zynga to an initial public offering that valued the company at $10 billion, has grown less urgent to its operational needs. But while Pincus has been less involved at Zynga, he has managed to keep himself extremely busy.

Sources said that lately Pincus has turned his attention back to investing, where he previously found success by taking early stakes in companies like Facebook, Twitter and Brightmail. According to one source with direct knowledge of his investing activities, Pincus invested in Dropbox, which is expected to be the next high-profile technology IPO following Twitter. Another source familiar with his activities at Zynga said Pincus even explored raising a fund of his own, though it’s not clear if that ever moved beyond the informal phase.

Earlier this year, Pincus — like much of the rest of Silicon Valley — sought to invest in the recently-launched and massively-hyped app, Secret, according to two people familiar with Pincus’ investing activities. But not unlike other potential suitors, Pincus was turned down, though not before he invited the team to his Aspen home to meet his family, according to these people.

Pincus in recent months has made himself just a little more present at Zygna’s headquarters, nicknamed the “dog house” because of the giant red and white dog logo on the side of the building, on San Francisco’s Townsend street, near the Caltrain station. He has been quietly checking in and gathering individuals for special projects and prototyping, according to two people familiar with his activities, according to two people familiar with Pincus’ activities at Zynga, though it’s not clear if they have formalized into actual teams or products.

Whether Pincus will revert to wanting to control the company again is an ever-present question. Zynga’s corporate suite is no stranger to executive turnover, after all. The company has named three chief operating officers and two chief creative officers in the past three years. Zynga alumni ominously point out Pincus’s habit of becoming “obsessed” with an individual — usually for around a year to a year and a half — before moving on to the next person.

Still, it’s hard to deny the enthusiasm that many industry watchers and insiders have for the new, post-Pincus Zynga. And, for the time being at least, it seems he is content to let Mattrick take the wheel — including today’s largely symbolic step back from a position that he never seemed to fully occupy in the first place.

Read more: http://buzzfeed.com/mattlynley/mark-pincuss-vanishing-act

Zynga Founder Mark Pincus to Step Down from Day-to-Day Role

Zynga Founder Mark Pincus to Step Down from Day-to-Day Role

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Zynga CEO Mark Pincus speaks at a Zynga event in San Francisco on Oct. 11, 2011.
Image: Jeff Chiu/Associated Press

Zynga founder Mark Pincus is leaving his role as chief product officer at the mobile gaming company and relinquishing his last link to the company’s day-to-day operations.

The news came as Zynga announced mixed first-quarter earnings. The company reported a loss of $0.01 per share, in line with expectations, and revenue of $161 million that beat estimates.

Zynga shares rose 5% in after-hours trading.

Pincus will retain the role of chairman on Zynga’s board of directors. The absence of Pincus from the day-to-day operations leaves the company in the hands of CEO Don Mattrick.

“I’m writing today to share that I have decided to change my role to non-executive Chairman,” Pincus wrote in a letter to Zynga employees that was also posted on the company blog. “This means that, while I’ll still keep an office at Zynga, and be active in supporting the company, I will not have an operating role. Most importantly, I remain Zynga’s largest shareholder and biggest believer.”

While Pincus may not have the same control over the daily operations of the company, his position on the board as well as the company’s structure means his still retains control of Zynga.

 

Among the positive signs from the earnings report, Zynga’s mobile monthly active users grew 11% quarter over quarter, and its popular Words With Friends game added 8% to its monthly audience.

Zynga displayed growth compared to its fourth quarter of 2013 but still well below the numbers is posted a year ago. Average daily bookings, which measures daily income per average daily active users, continues to rise.

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Read more: http://mashable.com/2014/04/23/zynga-founder-leaves-operations/

Game Over, Zynga? Stock Down 40% After Poor Earnings

Game Over, Zynga? Stock Down 40% After Poor Earnings

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Zynga reported its second quarter earnings Wednesday and the results aren’t good, falling short of analyst estimates for both revenue and earnings per share.

This is only Zynga’s second quarter as a public company and after tepid first quarter earnings, the company needed a win. That didn’t happen. The stock is down nearly 40% after-hours trades at the the time of this writing.

Looking at the results, its hard to find any bright spots for the social gaming giant.

Revenue was $332 million, up 19% year over year, but falling short of analyst expectations. Moreover, bookings were down 8% compared with the first quarter of 2012.

Zynga also reported a net income loss of $22.8 million, thanks in part to a $95.5 million stock-based expense.

The company reported a diluted earnings per share (EPS) loss of ($0.03) for the second quarter and a non-GAAP (generally accepted accounting principles) EPS of $0.01.

Zynga also adjusted its outlook for the rest of 2012 in order to “reflect delays in launching new games, a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform, and reduced expectations for Draw Something.”

The Facebook revelation is interesting, as it could indicate either increased competition on the platform or larger monetization problems on Facebook itself.

Facebook stock is also down about 6% in after-hours trades. Facebook announces its first earnings as a public company on Thursday.

What do you think of Zynga’s dismal stats? Has the bubble burst? Let us know in the comments.

Read more: http://mashable.com/2012/07/25/zynga-q2-earnings/

Zynga Beats Q3 Revenue Estimates; Stock Rises 15%

Zynga Beats Q3 Revenue Estimates; Stock Rises 15%

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Zynga beat analysts’ estimates and announced a $200 million share buyback plan, a combination of events that prompted a 15% jump in the company’s stock price in after hours trading.

The gaming company posted revenues of $317 million for the quarter, beating estimates of $256 million. Net losses were 7 cents a share and adjusted earnings per share were zero, which was what analysts expected.

The buyback plan is intended to boost Zynga’s stock price, which has fallen as low as $2.10, by cutting the number of outstanding shares. Zynga’s stock price has fallen 77% since the company’s IPO.

“While the last several months have been challenging for us, Zynga remains well positioned to capitalize on the growth of social gaming,” Mark Pincus, CEO and founder of the company, said in a press release announcing the results. “We’re implementing a number of steps to drive long-term growth and profitability. The successful launches of FarmVille 2 and ChefVille in the third quarter demonstrate that when we develop great games, our large player audience engages. It’s more clear than ever that along with search, shop, and share, play is a fundamental pillar of the Internet, and Zynga continues to be the leader.”

On Wednesday, Zynga cut 5% of its full-time workforce and closed several studios in an effort to cut costs. The company revealed in its earnings Thursday that these cuts should save the company $15-$20 million in the fourth quarter.

At the same time as the earnings came out, Zynga also announced a partnership with bwin.party, a real-money gambling company in the U.K, which should serve as an additional source of revenue for the company.

Read more: http://mashable.com/2012/10/24/zynga/