World’s number 1 Social Networking Site Facebook doesn’t seem too happy with its games development partner Zynga. If the recent regulatory filing by the two companies is to be believed, Zynga’s highly preferential status on social networking company’s website seems to have been taken away.
Way back in 2010, Facebook & Zynga’s partnership was a close knit one. While Facebook has famously proclaimed that it won’t develop any games by itself, it was an indirect display of confidence in Zynga. Even today, Zynga contributes 15% of Facebook’s total revenues through games people play that were developed by the company & hosted exclusively on Facebook. However, Zynga needs Facebook more than the other way around as over 80% of its revenue comes from Facebook.
What does the amendment reflect?
Condensed in a single statement PJ McNealy, CEO of Digital World Research says, “Zynga’s favored nation’s status is gone but it seems like it’s been slipping away for a while now”. What this means is though highly popular games like “FarmVille” and “Mafia Wars” will be featured on Facebook, clicking on their link will get users redirected to Zynga’s own website.
But that means Zynga’s is becoming autonomous. Though it clearly implies Zynga’s establishment as an independent company, it won’t get to draw users from Facebook’s subscriber-base which recently breached the 1 Billion mark. Zynga won’t get to promote its site on Facebook. However, what’s worst is the fact that users of Zynga’s gaming website will no longer be able to tap into their network of Facebook friends or post messages about their gaming progress to Facebook. Any company knows today that social sharing is one of the most rudimentary requirements to jack up usage, besides advertising.
What could be the reason behind the drift?
While analysts may argue the companies have been drifting apart for some time, it could also corroborate in the processes Facebook has been adopting lately. After Facebook’s debacle on NASDAQ, many confirmed their suspicion that Facebook’s financial strategies are not up-to-the-mark. Hence the company has been tweaking its work policies & introducing features, that would ultimately restore faith in the company’s ability to make money, above all else. Now that Zynga has lost its preferred status, will it bid for advertising slots just like everyone else?
Image Courtesy | allthingsd