There have been a number of rumors over the last couple of weeks that Zynga, one of the most popular developers of Facebook applications who have developed games like Farmville and Mafia Wars, would be leaving Facebook and looking for another place to set up their online games.
The rumors started with Facebook changes to the way developers made money from Facebook, and the introduction of Facebook Credits, which would mean that Facebook would take 30 percent of a developer’s revenue. This significant cut was seen as a potential threat to the profitability of game developers, leading to widespread speculation about Zynga’s future on the platform.
The Five-Year Deal
Facebook and Zynga have announced that they have struck a five-year deal that will keep Zynga games on Facebook for the next five years. No details of the revenue-sharing deal were announced, although we suspect Facebook is taking considerably less than the original 30 percent. This agreement is a significant development, as it ensures that popular games like Farmville and Mafia Wars will remain accessible to millions of Facebook users.
Players will have to use Facebook Credits for the games instead of the developers’ own forms of in-game currency, which will give Facebook more revenue. We suspect it is considerably less than they wanted, but the alternative of losing the Zynga games from Facebook would have done them more damage in the long run. The introduction of Facebook Credits was a strategic move by Facebook to standardize transactions on its platform, but it also posed a challenge for developers who had their own established in-game economies.
Impact on the Gaming Community
The deal between Facebook and Zynga is not just a business arrangement; it has significant implications for the gaming community. Zynga’s games have a massive following, and their potential departure from Facebook had caused concern among players. The agreement ensures that players can continue to enjoy their favorite games without interruption.
Moreover, this deal highlights the importance of collaboration between social media platforms and game developers. It sets a precedent for how revenue-sharing models can be negotiated to benefit both parties. For Facebook, retaining Zynga’s games means keeping a substantial user base engaged on their platform, which is crucial for their overall user engagement metrics.
For Zynga, staying on Facebook allows them to maintain their massive audience and continue to grow their user base. It also provides them with a stable platform to introduce new games and features. The use of Facebook Credits, while initially seen as a drawback, could also streamline the payment process for users, potentially leading to increased in-game purchases.
The five-year deal between Facebook and Zynga is a win-win situation for both companies and the gaming community. It ensures the continued availability of popular games on Facebook while allowing both parties to benefit from a mutually agreeable revenue-sharing model. This agreement could serve as a model for future negotiations between social media platforms and game developers, highlighting the importance of flexibility and collaboration in the rapidly evolving digital landscape.
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