Gaming company Zynga Inc. (ZNGA - Snapshot Report) has taken an innovative approach by testing bitcoin for facilitating in-game payments. The gaming company recently made an official statement that it is working with BitPay to facilitate acceptance of the currency in some of its games.
Bitcoin is a digital currency platform, which has a decentralized payment system. This means that there is no central regulating authority involved in the transactions. In this particular type of electronic currency, transactions are carried out directly between the involved parties. It is also called crypto currency because it utilizes military-grade cryptography to protect against fraud.
Since bitcoin is a widely accepted electronic currency platform, so the usage of bitcoin will use the gaming enthusiast into an impulsive buyer. Moreover, the acceptability of the bitcoin platform will help the end users to accept the safety of the platform.
Bitcoin payments can be conducted easily using different apps on a smartphone, with the help of software or through its online version. There is no need for a credit card or a PIN or for any documents to be signed. This is generally required for transferring funds electronically.
Zynga has been trying to boost its competitive position in the mobile gaming segment through the launch of mobile games for Apple’s (AAPL - Analyst Report) iOS platform. This kind of payment facility will help the company to facilitate the whole process of online payment for subscription of games.
Zynga posted mediocre third quarter results, with revenues falling considerably compared to the year-ago period. Although Zynga is expected to grow in the near term based on its innovative product pipeline and its dominant position in the social and mobile gaming sector, sales of the company’s online games have taken a major hit due to increased competition from other players such as International Game Technology (IGT) and Electronic Arts (EA - Analyst Report) .
Moreover, we note that barriers to entry are low in the social gaming market and this will attract new entrants, thereby increasing competition for Zynga over the long term.
Currently, Zynga has a Zacks Rank #3 (Hold).