Farmville And Facebook Heading For Splitsville?
- Zynga to diversify
- Expanding mobile offerings
- Income doubled but profit down
Social networking gaming developer Zynga has decided to diversify the distribution of its wares, which could affect fans of Facebook games Farmville and CityVille, according to a report in the Wall St Journal.
In July, Facebook started taking 30 percent of revenue from companies who have games on the social networking site including Zynga’s uber popular Farmville and CityVille. However, with the company about to offer an IPO (that could be worth about US$20 billion), it has seen a huge downturn in profits – from US$27 million down to just over US$1 million, although its income has doubled to almost US$280 million.
It’s hard to say whether Zynga is suffering financially due to Facebook having its fingers in the trough, or if it has had a capital spend on infrastructure – either way, Zynga CEO Mark Pincus believes interacting directly with consumers is the way of the future.
The company is also trying to expand its reach by making games for smartphones and tablets, and indications are that while there is no immediate threat for Zynga to quit Facebook, it could happen in the near future.
It would be interesting to see what happens to the traffic of the social networking site if the games were pulled.