Facebook Trying To Balance Zynga With Other Game Developers

By Justin Lafferty 

Facebook’s relationship with major game developer Zynga has gotten complicated. The two companies have been tied at the hip for a long time, but Zynga has been trying to cut back its reliance on the social network, since Facebook takes a 30 percent cut of profits from games on its platform. Facebook also wants the entire games ecosystem to thrive, not just Zynga. So when Facebook opened the app center, it gave smaller developers — such as Kixeye — a chance to compete.

According to the Los Angeles Times, game developers have been trying to move off the Facebook platform, citing the high costs of doing business. While it’s great to have the high visibility, the cost may not be worth it for companies that don’t have deep pockets like Zynga.

Mitch Lasky, a venture investor at Benchmark Capital who specializes in game companies, explained to the Times:

Facebook is still a viable platform for independent developers looking to make money on a game. However, companies with aspirations to be larger publishers — Kabam, Kixeye, even Zynga — are moving aggressively off the Facebook platform to mobile and the open Web. Publishers aren’t convinced that the costs of being on Facebook are worth it.

Companies say that in addition to the 30 percent cut that Facebook takes, the cost of marketing the game eats too much into the revenue. CrowdStar, once a major Facebook game developer, scuffled off Facebook rather quickly. In 2010, 90 percent of its revenues came from Facebook users. That figure was cut to 50 percent in 2011 and 10 percent this year. CrowdStar is relying more and more on people who play games on smartphones and tablets.

However, some game developers are being rewarded for sticking it out. When Facebook launched app center, it gave a voice to newer and smaller companies. The social network has also been working closer with developers such as Kixeye and Kabam to ensure a better experience for gamers. Facebook said to the Times that game usage has gone up 14 percent since last year.

P.J. McNealy, a media consultant with Digital World Research, discussed how developers have become more upbeat about the future:

There’s been a shift in tone among developers in the past two months as Facebook became more responsive to them. Depending on how it manages things, Facebook still has a chance to maintain its position as the premier platform for social games. At the end of the day, Facebook still has an audience and reach that no one else can touch.

Readers: Has app center introduced you to games from developers you hadn’t heard of before?