Zynga Tries to Patent Virtual Casino Currency

An attempt to *own* social media gambling transactions?

by , Oct 29, 2010 | 10:00 am

In last Friday’s twitfeed, my favorite tech-biz site Tech Crunch tweeted about their post  “Is Zynga Trying To Patent Virtual Currency?” Apparently, the leviathan of multiplayer gaming networks — and big wildcard in the future of real-money online poker — filed a US Patent Application in March of this year in an effort to corner the virtual currency market.

At least that’s my take. After reading the actual legal document, “Virtual Playing Chips in a Multiuser Online Game Network”, I gather what they are really trying to do is define and patent the purchase and flow of “Non-Redeemable Virtual Currency” as it pertains *specifically* to gambling on social networks.

ZyngaPokerChips 

click to enlarge


The Virtual Gaming Economy 1.0 … a One-Way Cash Flow to Social Networks
Today, virtual currency is part of a transaction model used for the purchase of virtual goods within online communities, particularly within the context of internet gaming — whether buying pixelated cocktails for your friends, cattle lanterns for your farm, or machine guns and a getaway car for your next virtual hit. In Zynga Poker, play is free, but players buy Zynga Chips to pad their play-money bankrolls, while Casino Gold (a.k.a. comps) can buy them useless crap a round of tequila for the table, regardless of such a purchase’s affect on a player’s EV.

They can buy Zynga Chips/Casino Gold using credit and debit cards, PayPal, or native social credits (like Facebook), a buying process known generically on the web as “micro-transactions”.  The best deal gets you a 480,000:1 ratio of virtual chips to the dollar.

Currently, the cash flows one-way only — into the pockets of Zynga. Players may purchase virtual currency from the network with real money, but have no method of “cashing out”, nor are they allowed by Zynga Terms of Service to buy or sell chips for actual money or trade goods from other individuals or businesses.

The Virtual Gaming Economy 2.0 … in a Legalized Online Gambling World
To my untrained legal eye, a review of the Zynga patent application reveals the company seeking to document a similar model to Zynga Poker for all casino games — poker, slots, and roulette are mentioned as specific examples. (Sports-betting is not, however.) According to TechCrunch: “Zynga is trying to patent the the ability to buy virtual currency that can’t be traded for actual currency or what happens in virtual stays in virtual.

While there is value to be had in owning the rights to process virtual currency as it stands, the concept, expanded one step further to allow players to “cash out” wherever gambling is legal, would truly be worth owning.  Google surely must have known about this patent pending when they sunk a bunch of cash into Zynga sometime in June. The document mentions some forms of regulation and fraud detection in play, and the online poker industry, of course, is very aware of efforts to prepare them for such transactions in a future real-money world.

I had to laugh, though, at the following stipulation in the app: “transfers can be limited to players who are friends or otherwise connected within the context of an online social network (e.g. transfers are only allowed between players who are also ‘friends’ on Facebook.)”  I suppose that while Barack Obama seeks to link international transactions to taxpayer IDs, it seems sufficient in the virtual world that *we be FB-friends*.


7 Comments to “Zynga Tries to Patent Virtual Casino Currency ”


  1. Live Poker
    says:

    So they are trying to patent, virtual currency. Doesn’t currency by definition have to have some value? Not really sure where I am going with this but I read this post twice and not the post but the act of attempting to patent, virtual currency seems strange to me. If the virtual currency thing every becomes something that the idiot masses ever truly catch on to how could someone own the process? I guess I just don’t get it but thank god I’m not stupid enough to be forking coin over to Zynga for virtual nothing.


  2. Patagonia Poker
    says:

    How Come? Zynga…
    its like control poker chip…
    Its a very Big Money Dude…


  3. scarlet_lv
    says:

    LivePoker:

    You ask some good questions. To clarify:

    “If the virtual currency thing every becomes something that the idiot masses ever truly catch on to how could someone own the process?”

    1) The idiot masses have already caught on! This is a worldwide billion dollar industry worldwide. There are many estimates. One estimate found online:

    Virtual currency used in online games and buying virtual goods.
    2009 – 600-700 Million USD
    Projected 2012 – 2+ billion USD

    Worldwide market:
    2009 – 2+ billion USD
    Projected 2012 – 5-6+ billion USD

    Source: http://www.quora.com/How-big-is-the-virtual-currency-market
    Numbers based on public information on slideshare and emarketer

    2. I’m quite sure Zynga would love to own “virtual currency”! You are right.. it is clearly to broad a concept to own and it is already out there. This patent seeks to own the concept of “virtual playing chips”, that is “virtual currency” as applied to online gambling.

    I’m not a patent attorney (or an attorney at all), but this still seems too broad to own. It has been applied for, not awarded as far as I know.

    “Doesn’t currency by definition have to have some value?”
    Currency is a medium of exchange. Traditionally by definition this would be in paper or coin. In e-world, this can be electronic.

    In our example, Casino Gold is a virtual currency. It can be traded for items (of arguably bogus) value in the virtual world. Being able to buy a table full of players a virtual cigar makes seems like stupidity to you -and I-, but apparently the world disagrees with us to the tune of a cpl billion a year.
    Also….
    In this patent, and in the virtual currency world as it stands, it is not “legal” to trade back your virtual currency for real world items or real world currency. If (and I think when) this happens, the world economy will have some MAJOR issues to deal with. This is a much bigger concept than in gambling, or social gaming like Farmville. It is about the transfer of international funds on the internet.. truly global currency.

    Thanks for reading!

    Scarlet


  4. JoJo
    says:

    Hey, I heard of some guy that is trying to patent virtual gifts that have actual monetary value; calling them semi-virtual gifts. I know he has a patent pending. Is this even possible. It sounds way too broad to me??? Any feedback folks?


  5. Scarlet Robinson
    says:

    Jojo:

    Who is the guy? Email me, if you like – scar@scarletlv.com; would be interesting in taking a look at the patent.

    A quick Google shows it’s not only too broad but seems like commonly implemented. I’m not a lawyer but seems unlikely to go through to me unless he was using another term than “virtual gift” IMO, no matter what the scope of the patent.

    Scar


  6. Mark Novo
    says:

    @ LivePoker,

    Though I do not agree with calling any person rude name, on the other hand I agree with you that it is unbelievable what people would spend money on. I know of a company that has two separate sites – one free gaming and the other real money gaming where people bet against each other. On the free gaming one you get credits daily however if you want more you can buy them or monthly or yearly subscriptions.

    Do you believe that the free gaming site makes more then the real money gaming one?

    This has caught on quite a lot now and if you can keep customers interested, you can bet they will spend their money


  7. Casino slots
    says:

    Zynga is one of the best application of facebook for playing casino games like roulette, blackjack and slots. Its a good idea for players to play with virtual gaming currency.