Zynga to launch real-money gambling on Facebook
Amended contract between companies will see Zynga operate under terms similar to a standard developer " exclusive agreement to end in March with Zynga no longer required to use Facebook Credits.
Zynga could soon launch real-money gambling games on Facebook following a number of changes to Facebook and Zynga’s exclusive contract agreement seen by eGaming Review.
An SEC filing announcing changes to the relationship between the companies includes a tenet which states: “If Facebook allows real money gambling games on the Facebook website in countries where Zynga has real money gambling games, Zynga will subsequently launch such games on the Facebook web site, if certain conditions are met by Facebook.”
With Zynga partnering with bwin.party to debut a real-money offering for the UK market in the first half of 2013, the presence of Gamesys’ Bingo & Slots Friendzy on Facebook suggests that it will also be able to go live with a cash gambling product on the platform.
The provision was one of a series of conditions added to an amended contract signed by Zynga and Facebook, which essentially ends the exclusive partnership between the two companies, effective from 31 March next year. As a result Zynga will operate under terms closer to those of a standard developer, rather than enjoying what many saw as preferential terms.
The operator will no longer be required to display Facebook ad units or use Facebook Credits as the principal currency of its social games, and can now launch new titles on its Zynga.com or mobile platforms before rolling them out on the social network.
Its ability to cross-promote games will also be restricted by Facebook’s standard terms of service. While cross-promotion has traditionally been hugely successful for Zynga in ensuring the successful launch of new titles, recent releases have struggled to maintain strong initial growth, falling away after an early surge.
Commenting on the amended contract Zynga’s chief revenue officer Barry Cottle said: “Zynga’s mission is to connect the world through games. In order to do this, Zynga is focused on building enduring relationships with consumers across all platforms from Facebook and Zynga.com on the web to tablets and mobile.
“Our amended agreement with Facebook continues our long and successful partnership while also allowing us the flexibility to ensure the universal availability of our products and services,” he added.
The original contract between the two companies was signed in May 2010, described at the time as a “five-year strategic relationship that increases their shared commitment to social gaming on Facebook and expands use of Facebook Credits in Zynga’s games.”
The original deal offered Zynga a number of concessions to resolve issues between the companies after changes to Facebook’s terms of service concerning viral marketing saw a dip in Zynga’s traffic, and amid concerns that the social network’s 30% cut of payment revenues was excessive. By having the market-leading social gaming operator committed to using Facebook Credits, Facebook was also able to ensure other companies agreed to the 30% revenue share.
Following the announcement Zynga’s shares fell from US$2.62 to $2.35 in after-hours trading yesterday.
Photo of Zynga HQ courtesy of Ipsign via Wikimedia Commons