Ever since Facebook announced earlier this year that it would be changing the way it works with game companies, the question has been what would Zynga do.
Though nothing official has been announced, certain product decisions to its games suggest one possible outcome – Zynga may be planning on taking its games off of Facebook and leaving it all together.
It’s an open secret that the marriage between Zynga and Facebook has been on the rocks for some time.
On the one hand, Zynga is Facebook’s number one games partner and advertiser and Facebook is Zynga’s number one distribution channel. They should be the best of friends.
However, this symbiotic relationship makes each company’s business vulnerable to each other. When Facebook changed the rules of the game, removing all game notifications from its update feeds and announcing Facebook Credits, whereby Facebook will take 30% of all transactions, it made the relationship in the words of Business Week, complicated.
Ever since Facebook announced these changes, Zynga has slowly yet surely been working to make itself less dependent on Facebook. Last year, Zynga launched FarmVille.com (whereby users can play the game from its web site) and announced a deal with MSN to enable users to log into Farmville from MSN’s portal.
Recently, however, these changes have been added at a fast and furious pace:
- March 1, 2010: Zynga offered a new recipe for its dinosaur themed menu, but only if a user provided Zynga with their email address (as reported in Frisky Mongoose).
- April 25, 2010: Zynga added in-game gifting to FarmVille, allowing players to send and receive gifts from within the game screen (as reported in FarmVille Freak).
- April 29, 2010: Zynga started to require players for their games on Facebook such as Farmville, Mafia Wars, Café World and Treasure Isle to provide their emails to Zynga in order to keep playing their games (as reported in AOL’s Games.com Blog).
- May 1, 2010: Zynga added two new features to in-game gifting in FarmVille – the ability to send a thank you gift in return from within the game screen and ability to receive gifts without reloading your farm (as reported in FarmVille Freak).
Separately, these changes suggest Zynga is continuously adding features to better communicate directly with its players and improve the in game play experience.
When you add all these changes together and put it in context with the changes happening at Facebook, it appears that Zynga is preparing for the day when you can play Zynga games completely off of Facebook. Zynga is creating a huge email list to send direct email notifications to its users and adding in-game communication features.
One reason why this may be happening so quickly is that Facebook just suggested that it will be mandatory for all games to use Facebook Credits to sell micro-transactions within games. Facebook will take 30% off of each transaction. This is actually reasonable in the context of casual games. Apple takes a 30% cut off of each game sale in iTunes and with Downloads, some portals take up to 70% of the transaction.
Still, if Zynga is projected to earn $450 million in revenues off of micro-transactions in 2010, giving up 30% to Facebook is a good chunk of change.
Most social game companies plan to stick with Facebook and are embracing the changes, in part because they are dependent on Facebook and have no choice. But, with 120 million players a year, a huge amount of investment, and 775 employees, Zynga may be big enough to be different and gamble to leave Facebook.
To this casual observer, the break between Zynga and Facebook may not be a matter of “if” but more a question of “when.” My guess is that it’ll be later rather than sooner (no one walks away from money) but in the dynamic world of social games, anything goes!