The secret romance between Facebook and Zynga has been suspected for a long while now and as with nuptial court proceedings go, real affiliations are beginning to emerge.
It now emerges that Facebook have some pretty deep agreements with social gaming company Zynga and that this affiliation has been solidified in paper contracts. Let’s do a quick recap.
Zynga have dominated the Facebook social gaming space with a vice-like grip and it has long been suspected that this dominance could not have happened as Facebook simply watched idly by.
Millions of Facebook users spend billions of hours on these social games, the likes of Farmville and Cityville, and this has had the knock-on effect of Facebook having a higher retention rate and greater engagement.
It is now emergent that Zynga indeed had big brother watching over them and even helping them along. According to an amendment to the SEC application for their upcoming IPO, Facebook have revealed that they have indeed struck an agreement with Zynga to keep all their games exclusively on the platform and what’s more, that Facebook even promised Zynga certain performance metrics to juice up the deal.
The parties acknowledge that FB desires to enable Zynga to build the Zynga Platform on top of the Facebook Platform, and the parties desire to, amongst other goals set forth herein, work together to increase the number of users of each party’s products and services. [*] The parties further acknowledge that Zynga is making a significant commitment to the Facebook Platform (i.e., using Facebook as the exclusive Social Platform on the Zynga Properties and granting FB certain title exclusivities to Zynga games on the Facebook Platform). In exchange for such commitment, [*] the parties have committed to set certain growth targets for monthly unique users of Covered Zynga Games.
This comes as an oddity especially because it would seem that Zynga have more to gain from the affiliation. But that’s not the case. Apparently, almost 12% of Facebook’s revenues come from Zynga alone and this means Facebook had to play nice if only for the sake of protecting their cash cow.
That said, Facebook has been noted as having built its massive user-base based on OPP, or other people’s property, or in this case, other people’s content. This is another demonstration of the fact that Facebook are dead in the water with no user-generated content and that application developers such as Zynga, hold the key to the future success of the social media giant.