Saturday, August 06, 2011

Facebook & Zynga - This Won't End Well

Apologies if it seems I'm beating a dead horse here, as I know there have been a number of posts / comments about Zynga, but I just can't get over what I view as grim prospects for Zynga given its reliance on Facebook.

Our favorite social media site lays claim to 30% of sales Zynga receives through FB yet, according to a recent Bloomberg article, "substantially all" of Zynga's proceeds are a result of this partnership. That leads me to wonder why Facebook is being so generous? Only 30%? Hell, if it were my call, I'd squeeze Zynga for more. And if that happened, would there be any recourse? I can't imagine the game publisher really has any leverage in this fight.

Does anyone else feel that Facebook will inevitably push to renegotiate the rev-share terms? Or that such a situation will put even more pressure on a Zynga crew that already has to be feeling the heat given its high valuations? I just don't feel good about Zynga's chances here...

1 comment:

George said...

Given the extraordinary pace of Google+'s emergence, Zynga might soon have an alternative over FB. That would certainly give them some leverage. And that is not a question at all whether Google+ will want to offer games...