Facebook Gaming: Zuckerberg Explains Earnings Decrease

Facebook founder Mark Zuckerberg has revealed that earning’s from Facebook’s numerous social games are down quite a bit when compared to previous years. According to Computer and Video Games, the amount of revenue generated by Zynga’s casual time-wasters is down roughly 20 percent from 2011. However, payments from other game publishers are up nearly 40 percent.

Zynga is having a tough time of it here lately. In addition to seeing their stocks plummet dramatically since their IPO, the company has announced that it intends to eliminate jobs, studios, and poorly performing games in an effort to help cut costs. According to the Boston Globe, stocks rose five percent ahead of trading on Wednesday based on the company’s unfortunate announcements. Zynga head Mark Pincus explained the “painful” decisions were made to “streamline our operations, focus our resources on our most strategic opportunities.”

“Overall, gaming on Facebook isn’t doing as well as I’d like,” Mark Zuckerberg explained during a Q3 earnings call. “But the reality is that there are actually two different stories playing out here. On the one hand our payments revenue from Zynga decreased by 20 per cent this quarter compared to last year. But the interesting thing is that the rest of the games ecosystem has actually been growing. Our monthly payments revenue from the rest of the ecosystem increased 40 per cent over the past year since payments has been adopted. This evolution is pretty encouraging.”

Although Zynga is reportedly closing the books on 13 of its social games, one shouldn’t shed a tear for Facebook just yet. Payments made to the social networking site during the third quarter are up from $156 million to $176 million.

Since a large portion of its users are accessing Facebook through their mobile devices, the company continues to look for ways to capitalize on the platform.

“People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform,” Zuckerberg explained.

Do you still play games on Facebook? Are you worried one of your favorite games from Zynga could be on the chopping block?