Zynga No Longer Gets Preferential Treatment from Facebook
A deal between the two companies was dropped, ahead of the five-year limit
A few years ago Zynga signed an exclusive deal with Facebook, something no other developer had or could get. Given that Facebook was making hundreds of millions of dollars from Zynga alone at the time, it made sense.The contract was for a five-year period, during which Facebook got exclusivity on some Zynga games, while Zynga had to use Facebook Credits in all of its creations.
Now though, the deal is dead, Facebook and Zynga have agreed to drop the contract and Zynga will become just a regular developer on the site, granted still the biggest and the biggest revenue driver.
This means several things for both Facebook and Zynga. On the one hand, Zynga doesn't get any more special treatment. Facebook is even free to make its own games.
On the other, Zynga doesn't need to use Facebook Credits for transactions outside of Facebook, i.e. on something like its Zynga.com platform, which in turn means it gets to keep the 30 percent Facebook normally gets.
While the move does have advantages for Zynga, shares dropped 8.78 percent in after-hours trading. That said, share price is still trading higher than it's been for the past couple of months.