Zynga Gunning Up (And Lawyering Up) For War Against Facebook With Zynga Live
techcrunch.com
techcrunch.com
It's now clear that "open platform" hype is pure marketing spin -- bullshit-speak to make you think they actually give a fuck.
I'm writing a blog post on my thoughts about it, story at 11.
Right now I don't see anything good enough to start a transition away from Facebook, even if many people wanted to move elsewhere.
1) At one point are people willing to give up on Facebook w/o an alternative in enough numbers to seriously hurt the site.
2) How big is the time window that FB has to fix the problems before a competitor automatically could become a serious threat simply because of how fed up people are?
Their current behavior is very poor strategy, even from someone as powerful as Facebook.
I am not saying that there can never be another social network that knocks Facebook out of #1, but bringing back features or privacy settings that Facebook dropped in favor of long-term growth is not the strategy that will bring about that kind of change.
Zynga helps Facebook by keeping people on the site and giving them a reason to come back. Facebook gives Zynga a huge audience to tap into. If Zynga goes off on its own I don't see it helping either one.
I'd be happy though, less Farmville spam to deal with.
However, it's unclear whether Zynga would continue to advertise on Facebook even if their games no longer run there. I'm pretty sure much of their growth is due to ads on Facebook. It really would be the dissolution of a symbiotic relationship, which I imagine will be tough on both companies. Seems like the perfect candidate for an acquisition, but who would acquire whom? Does Zynga bring in more revenue than Facebook?
Zynga has a very weak hand, and facebook can always give priority placement to game companies that decide to play by the new fb rules.
Zynga's games are absolutely replaceable all the game companies have games that are almost perfectly identical.
This "leak" shows how weak Zynga's position actually is.
But I don't think that anyone who has invested over a year in gaining achievements and advancement in FarmVille is going to just switch to a new farm game and start all over again.
The headline implies yes, but from the content of the article it sounds much more like this is just gamesmanship as the negotiate a rev share and need to act as if they have other options.
On the surface, this looks as credible as when Time Warner Cable and Viacom were pretending they could part ways.
But here's the worst from Zynga's side:
I dont think there is anyway Zynga can move people over fast enough -- fb will own a large chunk of user data (and realistically that's the big advantage Zynga has right now -- copying gameplay is easy, analytic packages are out there like mixpanel to optimize ROI on ads).
This really signals fb must really see gaming as a pathway to significant profits, and fb is will own the data on the most active and profitable players ( time spent, new games tried and with fb currency $ spent etc.) and could always expose this data to advertisers in some fashion to commaditize the market further.
I understand its their platform, and they can do what they want, but they should live and die like any other payment system. Zynga should choose them because even with the 30% skim, Facebook credits still give Zynga more revenue than other payment systems. This isn't too hard to imagine - Facebook has the ability to integrate credits with their site like no 3rd party provider can.
Instead they come across like cry babies.
This is what happens when you depend on anyone for anything.
As a platform owner, it must suck that people are making more money off your platform than you. So you are tempted to co-op other people's revenue stream as your own.
A more appropriate analogy would be if Google had paid inclusion of advertisement directly in search results, rather than on the side. In that case, it would be fair for Google to be extremely judicious about those ads.
Now, this isn't the same type of garden as AOL in the day. It's more open, but make no mistake, Facebook controls the user, not Zynga. Because of this, Zynga has more risk than another web-based game company would be. At the same time though, Zynga has gained incredibly from the relationship.
But, if Zynga wants to keep the users coming, it needs to maintain that Facebook relationship.
This is what you should expect. Platforms will maximize their profits if they "tax" people the way countries do. Unlike a country, a platform can often tax more efficiently, and closer to the peak of the Laffer Curve.