Zynga Distances Relationship With Facebook In Attempt To Grow In Weak Market
Zynga is loosening the terms of its relationship with Facebook, breaking the longstanding partnership as the game provider looks to get into the social gaming market on its own.
There is a heightening concern that Zynga and Facebook could one day become rivals, Bloomberg notes, another factor in the split between the companies. Zynga makes most of its revenue through virtual goods and games on Facebook, but it will no longer require gamers to be logged in to the social networking site to play.
The separation between Zynga and Facebook also allows the gaming company the option not to display ads served by Facebook and not to use Facebook payments as a way for users to make purchases.
In return, Facebook is free to develop its own games, leading some to believe that the companies will be in competition soon.
“The relationship between Facebook and Zynga has seemingly worsened,” said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc.
Facebook said the agreement puts Zynga on par with its other programming partners.
“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 a 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 announcement of the split with Facebook caused Zynga stock to drop on Thursday after markets closed, the Washington Post reported. The maker of FarmVille, CityVille, and Words with Friends saw its stock fall 31 cents, or 11.8 percent, to $2.31.