The video game company behind Bejeweled and Bookworm is releasing its first casino-style game, Lucky Gem Casino, to Facebook. PopCap, a subsidiary of Electronic Arts (NASDAQ:EA), has launched the game in a beta, or testing, phase. The title is the company’s third on the Facebook platform and an apparent attempt to compete with the expanding casino-game offerings from Zynga (NASDAQ:ZNGA).
Lucky Gem Casino is a slot machine game featuring seven different machines, each based on a popular PopCap title. Users play on one machine until enough points have been earned to unlock the next theme. Social functions, such as chat and tournament play with other Facebook users, are limited at this time but PopCap hopes to flesh that out in the near future. Lucky Gem has earned mixed early reviews and will need to solidify its game play if it wants to keep up with Zynga’s titles.
Zynga Poker is one of the standard bearers among casual casino games. Launched in 2007, Poker still maintains 6.7 million daily active users (DAU) and 33.4 million monthly active users (MAU), according to AppData. Just as impressive are the figures for Zynga’s CastleVille, a casual social game launched last November that attracts 6.8 million DAU and 28.9 million MAU despite being a relatively new title. Zynga also has adjusted its game offerings, with releases such as Bingo and Slingo, to expand the Zynga Casino suite.
Currency, of the virtual sort
Lucky Gem Casino and similar games monetize through in-game purchases called microtransactions. Online gambling is currently illegal in the United States, though a recent legal decision hinted at potential legalization. The casual games already on the market are able to earn money using a workaround. Free virtual currency is provided to players in a set amount; additional virtual money can be purchased with real money. Winnings, or leftover virtual currency, however, can’t be traded back in for real money. The virtual currency is, therefore, no different from virtual goods that can be purchased in games that don’t have a gambling theme, such as the virtual buildings or plots of land that can be acquired in Zynga’s FarmVille.
Although it has a smaller audience, PopCap, like Zynga, can cross-market between its established Facebook titles. Bejeweled Blitz, the most popular PopCap title on Facebook, earns only 3.1 million DAU and 10.4 million MAU, and a PopCap game called Zuma Blitz attracts 540,000 DAU and 2.8 million MAU. An additional game, Solitaire Blitz, will be added to the roster in March. The small user overlap between PopCap titles means that the company’s marketing push has to be strong enough to attract new users at high rates.
Electronic Arts acquired PopCap last year for $650 million in cash plus $100 million in stock. Reports at the time indicated that PopCap earned annual revenue of more than $100 million a year. The most profitable games for the company have been the computer game downloads of Bejeweled and Plants vs. Zombies, which accounted for 40% and 20% of revenue, respectively.
EA has a robust videogame pipeline aside from PopCap and has shifted its focus to digital games, which are downloaded from online stores, through gaming social networks, and to mobile devices. The company reported digital revenue exceeding $1 billion in fiscal 2011. EA’s success means that PopCap titles have an economic cushion, but that doesn’t guarantee unprofitable titles won’t be trimmed from the lineup.
