Facebook: Zynga Accounts For 12 Percent Of Our Revenue
Zynga is obviously important to Facebook, but we never knew how important until Facebook’s S-1 filing yesterday.
In the document, it’s said that Zynga accounted for approximately 12 percent of Facebook’s revenue last year.
Facebook made most of its money off of Zynga from Facebook Credit purchases. Whenever somebody buys Facebook credits to buy virtual goods in a Zynga game, Facebook gets a 30 percent cut. They also made money off of Zynga buying ad space from the social networking giant.
Facebook also points out that Zynga has a lot of app pages on the site which contributes to the company being able to display large amounts of ads across all those pages.
Facebook relies on Zynga so much that if the companies were to have a falling out, or if Zynga’s games stop attracting business, it would hurt the company’s bottom line.
While Zynga is important, Facebook relies on all the social games on their platform. Almost all of Facebook’s revenue from payments for Facebook Credits comes from social games.
As you may recall, Zynga went public last December and raised $1 billion. There were mentions of Facebook’s importance to Zynga, but with Facebook’s filing we can see how important they truly are to each other.
As mentioned before, Facebook gets a 30 percent cut from the purchase of Facebook Credits. The two companies signed a contract in May 2010 sealing that deal. The contract will expire in 2015. We have not been able to see much of the contract, but Facebook’s public filing may reveal more.
All this just goes to show you how important social games have become to not only Facebook, but to the gaming economy as a whole. There are still doubts as to the longevity of social games, but they seem to be doing really good for the time being. Only time will tell if this is all just a fad or if Facebook made the right decision in becoming so intrinsically tied to Zynga.
If you want to know more about Zynga’s importance to the company and other tidbits about Facebook’s IPO, check out our coverage from yesterday.