Facebook Issues First-Ever Press Release Reassuring the Market It’s Still Working With a Platform Developer
In what is an interesting sign of the times, Facebook and Zynga this morning issued press releases announcing that they plan on working together for a long time. It’s the first time Facebook has ever issued an announcement of this type, as the company has historically had a policy of not making many public comments on business issues regarding specific developers.
But both companies apparently were motivated enough to send a signal to the market that despite the recent issues in their relationship, they’ll be working together. For Zynga, the announcement reassures the market that its presence with its largest distribution partner is stable — though there are many outstanding challenges around monetization, platform policy, and user communication that will still greatly affect Zynga’s high level product roadmap, both within its Facebook portfolio and across other platforms and destinations.
For Facebook, today’s release was apparently intended to let the market know that things are still under control with Zynga, despite Zynga’s recent displeasure with the way Facebook has adjusted its platform user communication products, policy enforcement style, and pressure on the use of Credits (Facebook’s universal virtual currency for user purchases of virtual goods in social games). Zynga is not getting any special treatment on Credits terms, Facebook says, but other terms of the deal were not announced.
In general, animosity between the two companies has been growing as of late. But the tension between Facebook and Zynga is natural, as Zynga is currently the largest developer on the Facebook Platform by 5X (by portfolio-summed daily active users) over #2 Playfish/Electronic Arts, according to AppData. More jostling for leverage should be expected: if Zynga is able to preserve its distant lead on Facebook, and build up more of its business off of Facebook, it could get even more aggressive in how it negotiates. But for now, it appears to be living with pretty normal terms.
Nevertheless, Facebook has certainly never announced that it plans on working with a specific developer for 5 years before. We’ll let you know as we learn more about the agreement.