Zynga is set to launch a new service on its own Zynga.com domain that will allow its users to play games like Words with Friends or CityVille directly on their web site, called Platform for Play. According to Chief Operating Officer John Schappert, this independence will also allow players to be paired with opponents they’re not friends with on Facebook.
However, the service is not independent of Facebook: players still need to log into the service using their Facebook credentials, and Facebook is still utilized for making purchases in relation to Zynga’s games. It’s important to note that Facebook enjoys a 30% cut of any profits made off digital goods purchased using Facebook Credits. Zynga has declined to comment on any inquiries on whether or not they would sell the goods themselves in the future. In addition to Zynga’s own games, the new service will act as a host to games developed by other companies, such as Orlando-based Row Sham Bow, San Diego-based MobScience, and Montréal-based Sava.
Zynga went public with an IPO in December and sold approximately 100 million shares at $10 each. However, in the weeks following, the stock immediately fell below its initial $10/share price. It wasn’t until February that Zynga’s stock experienced a rise above $10. In the middle of last month, shares peaked at $14.352, but then settled at about $12. Following this announcement, shares experienced a 9.95% rise to $14.48, their highest share price ever.
Analysis: This really isn’t a huge groundbreaking move for Zynga. They’re pretty much relying on Facebook as much as they did before, only a little less. For a company that makes 93% of its revenue on Facebook, they can’t afford to cut ties. Likewise, I doubt that Facebook would approve of Zynga doing so because according to their IPO, 12% of their total revenue comes from Zynga. Long story short, Zynga and Facebook are happily married.
It is somewhat interesting that Zynga is introducing other developer’s games through their service, but given past accusations with Zynga, I can’t help but question their motives. The only real financial benefit that Zynga gains from this is potential ad revenue. However, that will only come to fruition if people don’t keep accessing the games through Facebook. My prediction is that this service will be widely ignored. Unless it truly provides a reason for people to avoid playing on Facebook, their players are going to be content and happy sheep playing on Facebook just as they always have.