NEW YORK (TheStreet) -- Unlocking Zynga's (ZNGA - Get Report) upside potential may happen sooner than expected if content hungry Chinese firms have their way. China's mobile gaming market is growing at an estimated 20% a year and worth about $3 billion.
I think Zynga is a value buy with many possible paths higher. I wrote a Real Money Pro post with exact entries and profit targets that you will want to take a look at.
In comparison, the U.S. mobile game market is valued at $3.2 billion and showing signs of maturity. Industry experts believe the Chinese mobile game market will overtake the U.S. this year. There are already more smartphones in China than the total U.S. population. Worldwide, the 2014 mobile game market is anticipated to exceed $21 billion in revenue.
You may have played one of the many Zynga games and King Digital's (KING) Candy Crush Saga, but are you familiar with Crossfire by G4Box? Crossfire claims 400 million or more users and is the world's number one revenue generating freemium game. In 2013, Crossfire produced almost a billion dollars in revenue.
Chinese gamers started playing Crossfire in 2008 when Asia's largest Internet company, Tencent Holdings bought the Chinese rights. Shenzhen, China-based Tencent Holdings trades on the Hong Kong exchange.
Tencent Holdings bought the Candy Crush Saga Chinese version rights and is in an arms-race for market share against the likes of Baidu (BIDU) Alibaba Group. Yahoo! (YHOO) owns about 24% of the soon-to-IPO Alibaba. It's an IPO that will provide Alibaba and Yahoo! plenty of cash to use for expansion.
Tencent Holdings' war chest is also expanding based on Tencent Holdings' earnings report this month.The company reported a 60% jump in first-quarter profit and stated it intends to leverage its WeChat platform to market mobile games.