Facebook and Zynga have altered the contract the two companies signed in 2010 to allow for fewer restrictions on both parties. This comes after Zynga was responsible for 13% of Facebook’s revenue from the first two-thirds of the year.
What the Changes Mean
These changes promise to benefit both parties in different ways. Facebook can now design its own games, which could hurt Zynga who has already seen some disappointing numbers on a number of games. Facebook has stated that it does not plan to create any games; the focus is on being the platform for new games.
Zynga now has the option to allow users to log into games from their new site, Zynga.com. The company wants to make that space a stand-alone game site. Zynga can use their own payment system instead of Facebook’s which brought the social network site 30% of all sales. They also won’t have to allow Facebook ads on their games.
Facebook still gets access to all games that debut on Zynga.com or anywhere else. Another benefit for both parties is that they can both promote games with the use of real money for gambling purposes in countries where the practice is allowed.
Zynga has already signed a deal with bwin.party to create poker and casino games that will appear in the United Kingdom in 2013.
Zynga sent out an email statement that states that they feel the amendment allowed them to continue working with Facebook while enjoying a flexibility that would allow them to expand for universal availability of their products.
While users may not see a major change for some time in the relationship between Facebook and Zynga evidenced in the games or website, in the future, they may notice Zynga games played elsewhere and possibly other games on Facebook. Zynga stock dropped after the news while Facebook remained steady and flat.