Does Facebook favor Zynga?

A famous quote from George Orwell’s Animal Farm is, “all animals are equal, but some are more equal then others.”

Based on Dean Takahashi’s excellent article in VentureBeat, this is how game developers perceive the relationship between Facebook and Zynga. Whether a special partnership exists or not, according to Takahashi, the mere fact that rumors are swirling will have a huge impact on social gaming in the year to come — for Zynga, Facebook, and if they play their cards right, Google.

First of all, though, let’s try to dispel the rumors. Based on Facebook’s public statements and Zynga’s most revised S1 document, there does not appear to be any Facebook-Zynga relationship that is anything different from what we would see when a console maker such as Sony or Microsoft does with Activision or EA to get an exclusive.

Facebook is not sharing advertising revenues with Zynga. And, like everyone else, Zynga is paying Facebook 30% off of each transition on its Facebook Credits platform.

But, there is evidence in the S1 that suggests that some animals (Zynga) are more equal than others: In exchange for using Facebook Credits, Facebook agreed to help Zynga meet certain growth targets. It’s not specified how, but we can assume its through special ad deals or special promotion by Facebook to Zynga (for example, through a Discovery module it has been testing).

Facebook has unofficially played favorite with certain developers in the past, offering millions of free impressions in promotion for game developers who test certain features.

The Facebook-Zynga deals seems to be more formalized. And it’s logical that it exists. Facebook has 800 million users and Zynga has 265 million users, all of which are Facebook users. If you do the math, you can see — it’s in Facebook’s extreme interest to keep Zynga on Facebook and adopting Facebook Credits for now.

Regardless, according to Takahashi, social game developers are miffed about any potential unfair advantage Zynga may have on Facebook. They expressed this anger to him at Casual Connect a week ago, almost all anonymously for fear of upsetting either Facebook or Zynga. Some believe Zynga pays less than 30% for Facebook Credits because the 30% number is redacted from the company’s S1 document. Others that Zynga gets to send out more invites per game than others.

Whether fact or fiction, social game companies are increasingly looking for ways to distribute their social games beyond Facebook, whether that be through mobile (Android, iOS), the future Google+, or any other start up looking to launch a social games network.

Google in particular has a huge opportunity to use games as a trojan horse to grow its Google+ social network to compete with Facebook. Google needs to not fumble the games opportunity in the same way it has messed up with the business opportunity so far with Google+.

As for Facebook and Zynga, if a special relationship exists between the two, all I can say is that it’s good to be king. With all the rumors swirling, grumblings by social games developers, and new distributors launching, it will be interesting to see how long both companies can remain king of the social games hill.

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