The full extent of Facebook’s reliance on Zynga was revealed this week, with the social network receiving 12% of its revenue from the games maker last year. In its S-1 regulatory filing Wednesday, Facebook reported that it received 12% of its revenue in 2011 from Zynga, whose social games such as CityVille and Mafia Wars […]
The full extent of Facebook’s reliance on Zynga was revealed this week, with the social network receiving 12% of its revenue from the games maker last year. In its S-1 regulatory filing Wednesday, Facebook reported that it received 12% of its revenue in 2011 from Zynga, whose social games such as CityVille and Mafia Wars have drawn several hundred million players to Facebook over the years. Zynga launched its own IPO in December. With $3.7 billion in total annual revenue for Facebook, that translates to roughly $444 million in direct payments from Zynga.
That figure does not include the revenue Facebook receives from displaying advertising around Zynga’s games, which accounted for a “significant number of pages,” according to the social network’s public filing.
Zynga’s games pull in 56 million players a day, according to AppData.com, a site that tracks Facebook traffic.
For Facebook, Zynga is both an asset and a potential liability: “We currently generate significant revenue as a result of our relationship with Zynga, and, if we are unable to successfully maintain this relationship, our financial results could be harmed,” the Silicon Valley social network giant wrote among its “Risk Factors.”
“If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected,” Facebook added.
Zynga has been trying to reduce its dependence by pursuing with things like partnerships with other companies and by developing its own gaming portal.
The companies have had their differences in the past. In May of last year, Facebook began requiring Zynga to pay the 30-percent transaction fee for Facebook Credits. That hurt Zynga’s profits, and it started diversifying beyond Facebook after that.
But the two companies have since patched things up, and Zynga is still heavily focused on Facebook, which has 800 million users.
