Facebook and Zynga loosen ties
Zynga.com is no longer an extension of the Facebook platform, according to an SEC document filed today.
Originally, Zynga’s games platform featured an extremely deep integration with the Facebook platform that appeared to be born of the developer’s privileged relationship with Facebook. Zynga.com previously supported Facebook ads and Facebook payments in a deal unlike anything any other developer had enjoyed. As of March 2013, however, Zynga is relegated to using the standard terms of service that every other developer agrees to when integrating Facebook with their own sites.
With the new agreement, Zynga is losing some (but not all) of its exclusivity with Facebook. As the developer struggles with falling stock prices and decreasing returns on investment in blockbuster social games, losing some protection from Facebook might cause stock to dip even lower. Zynga closed today at $2.62 and is now at $2.35 in after-hours trading. Facebook is also slightly down in after-hours, but still trading higher than the company has been since July.
Effective on March 31, 2013, Facebook will no longer guarantee Zynga certain web or mobile growth targets in exchange for continuing to invest in games on the platform. Facebook also will no longer be prohibited from developing its own games, however, it’s unlikely that the social network would get into the game development business any time in the near future. The company has generally taken the position of being a platform rather than producing its own content.
“We’re not in the business of building games and we have no plans to do so,” a Facebook spokesperson said. “We’re focused on being the platform where games and apps are built.”
Continue reading on our sister site, Inside Social Games.