Zynga moves away from Facebook, unveils Zynga.com
"CityVille" fans afraid to spam their Facebook friends with updates about their virtual hometowns can sigh with relief. Zynga has unveiled a new online destination, Zynga.com, where people can play its games away from Facebook, including with people who are not their Facebook friends.
This doesn't mean that Zynga is divorcing Facebook. Players will log into the site with their Facebook account information and spend money in the games through Facebook. But Zynga hopes the move will lure more players and get them to spend more time on its games, unencumbered by the non-game-related Facebook updates and comments that can distract them from tending to their virtual farms, cities or poker games.
John Schappert, Zynga's chief operating officer, says the new site will be "focused solely on gaming" once it launches later this month. It'll be a place for people whose Facebook friends don't play the games they play, or don't play games at all, he said. On Zynga.com, they will have "zFriends," and their profiles will be all about gaming. That means no baby photos, status updates or links to news stories. All that can stay on Facebook.
"Facebook has been struggling with how to handle two sets of users — one set who loves games and one set who doesn't," said Michael Witz, the CEO of online game company Mobscience.
Zynga.com, he added "creates a separate space where people who love to play games can play games." And Mobscience will be among its beneficiaries: Zynga said Thursday that it will let other developers create games for its network, giving them access to the 240 million people who play Zynga games each month.
"We really have shifted our entire company's mission and mantra to become the Zynga of Zynga," Witz said.
Zynga plans to share feedback with developers like Mobscience about players' experiences, including how engaged they are with a particular game or how much they want to continue playing.
Colin Sebastian, an analyst at Baird who follows gaming and Internet companies, said it's "smart for Zynga to create an independent and healthy platform." While the company is still "holding hands" with Facebook, Sebastian said, Zynga will be the centerpiece and brand name for its new gaming destination, and "there is a lot of value in that."
The announcement is a sign that Zynga, which went public in December, "is moving from technology investment mode to harvest mode," which should ultimately improve its profit margins, the analyst said. Sebastian said the announcement was expected and is baked into Zynga's guidance. Zynga began talking last fall about its own online playground "Project Z."
Investors may have interpreted the news as a sign that company is reducing its dependence on Facebook — whether or not that is the case. Zynga's stock rose nearly 10 percent to close at $14.48 on Thursday and continued rising after hours, picking up another 76 cents, or 5.3 percent, and climbing to $15.24.
But the companies' symbiotic relationship will continue. Because players will continue to spend money in Zynga's games through Facebook Credits, Facebook will continue to take a 30 percent cut. Zynga accounted for 12 percent of Facebook's $3.7 billion in revenue last year.