Facebook loosens ties with Zynga

John Ribeiro
2 December, 2012
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Facebook and Zynga have loosened their ties in an amended agreement that does away with most of Facebook’s exclusive rights to Zynga games, but also permits Facebook to develop its own games from March next year.

The social networking company, however, said it did not plan to develop its own games. “We’re not in the business of building games and we have no plans to do so. We’re focused on being the platform where games and apps are built,” it said in an emailed statement on Thursday.

In a regulatory filing late last week, Zynga said the amendments, which among other things remove the requirement that Zynga show advertisements served by Facebook and offer Facebook Credits as payment on its games sites such as Zynga.com, would be in effect until May 13, 2015.

Zynga’s use of the Facebook platform with respect to Zynga sites will also be governed solely by Facebook’s standard terms and conditions for game developers, thus ending the games developer’s special relationship with Facebook, which was a sore point with other developers.

“We have streamlined our terms with Zynga so that Zynga.com’s use of Facebook Platform is governed by the same policies as the rest of the ecosystem,” Facebook said in its statement. “We will continue to work with Zynga, just as we do with developers of all sizes, to build great experiences for people playing social games through Facebook.”

The amended agreement also eliminates the requirement that Zynga use the Facebook platform as its primary non-Zynga platform to launch social games, and removes the need for Zynga to use the Facebook platform as the exclusive means of login for games not hosted on the Facebook site, the social networking website said in its filing.

Under the amendments, however, any social game launched by Zynga will generally be available through the Facebook website concurrent with, or shortly following, its availability on another social platform or a Zynga property.

The requirement does not however apply to Zynga mobile games, social games owned and operated by a third party, social games that cannot be launched on the Facebook web site due to technical limitations, and any downloadable social games or any Zynga games launched in China or Japan, according to Zynga’s filing.

A third-party social game offered on Zynga websites will also have to be offered to Facebook if the game is acquired by Zynga. If Facebook allows real money gambling games on the Facebook web site in countries where Zynga has real money gambling games, Zynga will subsequently launch such games on the Facebook web site, if certain conditions are met.

The Zynga filing states that Facebook “will no longer be prohibited from developing its own games,” which gave rise to speculation that the social network may be planning its own games to compete with Zynga and other developers.

Zynga reported in the third quarter that 84 percent of its quarterly revenue was generated from the Facebook platform, down from 93 percent a year earlier.

In its quarterly report in October, Zynga had listed among its risk factors the possibility that “high-profile companies with significant online presences that to date have not developed social games, such as Facebook, Google Inc. and Microsoft Corporation, may decide to develop social games.” The games company said it was investing in its Zynga platform, mobile and other platforms, and also in integrating and operating some of its games on additional platforms, including Google+, Mixi and Tencent.

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