Is Zynga Worth $1 Billion?


Few doubt that social gaming companies have changed the face of gaming for years to come. And with talk that the companies that create the most populous games stand to earn game hundreds of millions of dollars in 2009 and even more in 2010 have financial types talking about how much each of these companies is worth.

Stock market types are usually a fickle bunch but the recent private sale of London-based Playfish to video game developer and publisher Electronic Arts for up to $400 million set the first bar in the valuation of social gaming firms. Yet, Playfish's reach with games like Pet Society paled in comparison to its top-tier competitor, Zynga. With over 200 million players in games like FarmVille, Mafia Wars, Cafe World and Cafe World, Zynga has name visibility.

Now, Bloomberg is reporting that if Zynga were to go public, it may have a value of over $1 billion. So says, Terry Schallich, head of capital markets for Pacific Crest Securities, a bank in Portland, Oregon that focuses on technology companies. Valued at that level, Zynga might soon be less of a competitor for Playfish and more of a competitor for video game console makers like Nintendo.