NASDAQ-listed casual gaming company, Zynga has announced yesterday that it has begun conducting an experiment in accepting payments for its virtual goods in Bitcoin in cooperation with the digital currency provider, BitPay.
Best known for its annoyingly popular 2009 Facebook game Farmville, Zynga is a developer of online games for mobile phones and websites, as well as Facebook and other social networks. The firm needs to find a way to recover after it lost half of its clients last year and published some very negative earnings reports.
Bitcoin payments for in-app purchases for video games might actually be a very natural application of the technology. Speedy processing is very important when dealing with impulse decisions by users, Paypal and credit card fees can be very costly for small micro transactions and buyers might feel sociologically more at ease to pay 0.0000002 of a virtual coin than $2 of their (parents’) hard earned cash to hasten their delivery of new virtual pesticide.
Zynga went public on December 16, 2011 at a price of $10 per share and carried by a wave of media hype peaked at $14.50 in March 2012. The company’s stock price has fallen sharply after that point, hitting a bottom of $2.09 in November 2012, and at the time of this writing is still under $4, a loss of 60% for investors since the IPO.
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The San Francisco based firm didn’t made the announcement in a very traditional way, Zynga did not sent a note to investors or the media about the move but rather just published a post in a popular forum for the enthusiastic Bitcoin community. This can be seen as a sign that Zynga is trying to get the community on its side, benefit from some free publicity but not make any commitments if the experiment is discontinued later on.
The company’s forum post read: “In response to Bitcoin’s rise in popularity around the world, Zynga, with help from BitPay, is testing expanded payment options for players to make in-game purchases using Bitcoin. The Bitcoin test is only available to Zynga.com players playing FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille”.
Union Square Ventures and Andreessen Horowitz, who invested in Zynga’s Series A and B funding rounds in 2008-09, both also have helped Bitcoin wallet service Coinbase secure $25 million in funding last month. If an influential VC such as Andreessen Horowitz is promoting Bitcoin adoption behind the scenes we might see more tech companies going this route.