There's been much talk about social games leader Zynga diversifying itself away from Facebook, and Zynga and other social developers didn't seem too pleased when Facebook announced it would be taking a 30% cut of revenues from Facebook Credits transactions, but now it would appear Zynga and Facebook have patched up their relationship.
The two companies today announced a five-year "strategic" partnership, which "increases their shared commitment to social gaming on Facebook and expands use of Facebook Credits in Zynga’s games. The agreement provides a solid foundation for both companies to continue to work together to provide millions of people with a compelling user experience for social games."
The vague press release didn't say much more than that, other than noting that Zynga is currently testing Facebook Credits in "select games" and will be expanding the Facebook Credits integration to more titles in the near future.
“Facebook was a pioneer in opening their platform in 2007 and in just three years tens of millions of Facebook users play our games every day, from FarmVille and Café World to Treasure Isle and Mafia Wars,” said Mark Pincus, founder and chief executive officer at Zynga. “We are excited about Facebook’s long-term commitment to social gaming and Zynga, and look forward to working with them and other platform providers to bring the best social gaming experience to users worldwide.”
“We are pleased to enter into a new agreement with Zynga to enhance the experience for Facebook users who play Zynga games,” said Sheryl Sandberg, chief operating officer at Facebook. “We look forward to continuing our work with Zynga and all of our developers to increase the opportunities on our platform.”
3 Comments
May 18, 2010
Sensible... a split would have hurt both companies, though it's not clear which company would have gotten the worst of it. I'd love to know the details of the deal, but I'm sure that's going to be kept secret. My guess is that Zynga won't be paying the same percentage as other companies will for Facebucks, but if that's true Facebook certainly wouldn't want other companies to know for sure.
I would also guess that Zynga and other companies that have a strong Facebook presence will be exploring ways to lessen their dependence on Facebook.
May 18, 2010
I think Zynga realized that they need Facebook more than Facebook needs them. I think they can still go ahead with their own Zynga Live portal and do both at same time.
May 19, 2010
Ive heard that F-book makes a 30% transaction cut for "Facebook Credit" that they push as the virtual currency across their platform. Think about the margins they generate from this. Zynga had better get their own platform off the ground or this 800 lb gorilla will be using them like Goldman Sachs uses their clients as tools for generating their own trading profits.