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socialcasinogamesgraphWhen former Microsoft Xbox boss Don Mattrick takes over as CEO of Zynga next week, he’ll be at the helm of a company that just fell from atop the $1.2 billion global social casino games market.

All signs point to a Zynga IPO
All signs point to a Zynga IPO

A new study from Elias Research shows Caesars Interactive Entertainment inching past Zynga for the first time as the top publisher of social casino games in the second quarter. Caesars, which partners with Microsoft and operates multiple social games, now has 18.6 percent of the market, according to Elias.

Meanwhile, Zynga fell 14.4 percent from last quarter — the biggest drop of the top-10 companies — and now has 15 percent of the market. Moving up to the third spot with 14 percent is International Game Technology, who acquired Seattle-based DoubleDown Interactive for $500 million last year.

Zynga’s fall was due to a double-digit percentage drop in Zynga Poker users on Facebook and mobile. The study also found that Facebook social casino game revenues were down overall, a pattern that Elias sees continuing as Facebook becomes more and more saturated as a gaming platform. Revenue generated on Facebook was down three percent last quarter to $309 million.

On the other hand, Elias reported that mobile is “becoming a much more important distribution platform for social casino games.” Seattle-based Big Fish Games, ranked No. 1 on our GeekWire 200 startup list, has the largest standalone social casino app with its Big Fish Casino, which brought in an estimated $14.5 million in revenue last quarter.

socialcasinogamemarketThe overall market is expected to grow 67 percent year-over-year to $2 billion by the end of this year.

Seattle has become sort of a hotbed for casino apps. On top of Big Fish and DoubleDown, GameHouse launched its own casino on Facebook earlier this year with more than a dozen games and also released a new iOS app. There’s also Jawfish Games, which recently debuted the first-ever real-time social gaming platform that supports live tournament play for more than 100,000 users on iOS, Android and on the Web.

Jawfish CEO Phil Gordon said there are reasons why you’re seeing so many casino games on the market while other social gaming companies like Zynga struggle.

“Casino-based games monetize at four times the rate of a standard casual game,” said Gordon, a former Netsys exec and computer scientist who is perhaps best known as a professional poker player and commentator. ”It’s easy to get people to pay for virtual slots than virtual farms.”

However, Mattrick thinks that Zynga is a “great business that has yet to reach its full potential.”

“I’ve admired Zynga for years. You have redefined entertainment and brought gaming to the mainstream,” he wrote in an introduction letter to his new employees. “Only Zynga combines engineering, industry-leading product management and analytics to deliver products that strike a chord with consumers and add real value in their lives.”

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