Zynga Inc (NASDAQ:ZNGA) stock and its business moved in contrasting directions last year. While the stock surged about 63% in 2013, its business continued to struggle due to the lack of new and exciting games. The online gaming landscape has become fiercely competitive, and shelf life of games have fallen. As a result, the San Francisco-based gaming company has seen a 50% decline in the number of daily active users over the past 12 months. Even active users have started spending less time on its games.
Zynga now accepts Bitcoin payments
What drove Zynga Inc (NASDAQ:ZNGA)’s stock last year was its cost cutting and turnaround efforts. The company has slashed its workforce, shut down more than a dozen unprofitable games, and has leased some of its unused office space to other companies. Zynga Inc (NASDAQ:ZNGA) has also been shifting its focus to mobile gaming, which really helped the company. Recently, the company started accepting bitcoin as payment. Users can now purchase in-game assets and upgrades using the virtual currency.
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Before the company decided to accept bitcoins, customers only had the option to buy in-game assets and upgrades with their debit/credit cards and PayPal. However, theft and fraud are major concerns when it comes to online payments. Many users are reluctant to share their debit/credit card information online due to concerns over fraud and theft. And the recent credit card data breach at Target Corporation (NYSE:TGT) has only added fuel to their worries. Although online payment has seen immense growth despite these security threats, users are more likely to use a safer option, if available, to make online purchases. Bitcoins are ideal in this regard.
Bitcoin and Zynga have similar user demographics
Statistics show that Zynga Inc (NASDAQ:ZNGA) and bitcoin customers share demographic characteristics. Most Zynga and bitcoin users fall into the 25-40 age group, and are tech-savvy with average income. More and more businesses have started accepting the virtual currency such as WordPress, OKCupid, Reddit and Overstock.com, Inc. (NASDAQ:OSTK). If bitcoin continues to grow at the same pace, this will improve the odds that it will become a popular mode of payment for Zynga Inc (NASDAQ:ZNGA) customers. This would be beneficial for both Zynga Inc (NASDAQ:ZNGA) and bitcoin.
Zynga Inc (NASDAQ:ZNGA) shares closed Friday at $3.55, up 0.28%.