This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Zynga Will Crush 'Candy Crush Saga's' King Digital

The company recently announced that the play-money social casino slots game Hit It Rich! now features Ted, the R-rated teddy bear with a sailor-inspired vocabulary. This follows the release of Riches of Olympus, another play-money slots game.

Play money isn't the same as no money, though. Both games allow players to spend real money on virtual coins, in the same way that Candy Crush Saga allows players to buy more turns. If that were the end of the story, there wouldn't be much to tell.

Play-money games are just the prelude to the real hidden value of Zynga. Zynga's leadership in play-money poker equates to a ready and willing list of users who will make the move to real money as soon as regulations and the company move forward. Zynga isn't working alone: Facebook (FB) allows users to bet real money on poker in the U.K.

Since January, I've offered several profitable trade ideas to gain exposure before the rest of the market catches on. I also updated RealMoney Pro on Monday with an option trade strategy after shares fell to less than $5 .

Zynga publicly announced and advised me that it's not pursuing real-money gaming. I don't believe it, and you shouldn't either. Sun Tzu's  classic The Art of War says, "Without deception you cannot carry out strategy..." I believe the company is keeping its cards close to its chest before it prepares its next move forward.

Real-money online poker is Zynga's No. 3 game in terms of revenue, and it doesn't include real-money casino games. Real-money gaming can easily scale to become 10-20 times (or more) as valuable to revenue and earnings as it is now.

There is simply too much money on the table for the company to ignore real-money gaming even if it wanted to, and I don't think for a minute it wants to let another company take it from them.

All Zynga needs is greater experience and an improving regulatory environment to maximize return. Along with the already available real-money games, the play-money Hit It Rich! and Riches of Olympus ensure a strong user base that can be monetized when the time is right.

Online gambling is gaining traction in several states and at the federal level. Don't expect the flood gates to open overnight, but they don't need to for investors to get a piece of the action.

At the time of publication, Weinstein is long Zynga.

Follow @RobertWeinstein

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs