Zynga and Facebook announced a new five year agreement that will keep Zynga on the Facebook platform for the foreseeable future. The deal comes on the heels of rampant speculation about Zynga abandoning the Facebook platform to avoid the 30% fees charged by Facebook when game players buy virtual goods with Facebook payments. While terms of the deal were not announced, Zynga likely won some modest concessions from Facebook to remain active on the platform, but Zynga is likely to continue to aggressively pursue it’s own platform, Zynga Live, to lessen its dependence on Facebook. We expect to see significant Zynga Live announcements in the coming months.
We view the agreement as positive for both Zynga and Facebook as a severing of the relationship would have been a negative for both parties, so its good to see that cooler heads prevailed.