Zynga social game players will be able to log in to the new gaming site via Facebook. The company retained the Facebook login option to ensure that existing gamers continue to have the best gaming experience without having to start from scratch
Zynga Inc (NASDAQ:ZNGA), the social gaming company that has relied on Facebook Inc (NASDAQ:FB) for most of its revenues, has taken one more step to distance itself further away by relaunching its website on Wednesday. Now the FarmVille publisher will allow users to play Zynga games without having to sign in with their Facebook ID and password – which had been a hallmark of Zynga games so far.
Zynga began operating its new gaming site on Wednesday, March 20, 2013, separating itself from Facebook once and for all (Click Image To Enlarge)
Founded in 2007, the company went too close to Facebook Inc (NASDAQ:FB). The two companies enjoyed a strong symbiotic relationship for years. Almost 90 percent of Zynga Inc (NASDAQ:ZNGA)’s revenues come from Facebook games, while the Menlo Park-based social networking site earned about 15 percent of its revenues from Zynga games.
In the process, Zynga Inc (NASDAQ:ZNGA) became so dependent on Facebook Inc (NASDAQ:FB) that its fate was tied to rise and fall of Facebook. We have witnessed that several times in the past.
Zynga inc (Blue) and Facebook Inc (Red) - Share Price Comparisons Since Respective IPO Dates - Google Finance (Click Image To Enlarge)
Zynga Inc (NASDAQ:ZNGA) began losing its competitive advantage as other gaming companies flocked to Facebook. It was then that Zynga realized its fault for not diversifying its business outside of Facebook site. A few months ago, Facebook Inc (NASDAQ:FB) amended the deal that used to give Zynga Inc (NASDAQ:ZNGA) special privileges on the social networking site. That deal had also prevented Zynga from partnering with other social networks.
Starting next week, you will see a modified Zynga.com website. Zynga Inc (NASDAQ:ZNGA) general manager Tim Catlin told Reuters that changes have been made after receiving feedback from players. They wanted to create their unique gaming names which are not tied to their real names displayed on Facebook. Using a separate gaming name is a plus for players who usually don’t want to reveal their real identities. Some other gamers wanted to play with complete strangers, not just friends.
However, players will still be able to log in to the gaming site via Facebook. The company retained the Facebook login option to ensure that existing gamers continue to have the best gaming experience without having to start from scratch.
Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA) both owe their initial financial success to each other, but they both want to diversify. That doesn’t mean a divorce, of course. Zynga and Facebook Inc (NASDAQ:FB) still earn a healthy part of their revenues from each other, and they still want a healthy relationship.
Zynga Inc (NASDAQ:ZNGA) shares were up 2.36 percent to $3.43 at 12:35 PM EDT
COMMENTARY: Zynga (NASDAQ:ZNGA) finished trading at $3.41 per share (down .01). I think this is a very risky move for ZYNGA because it may not be able to tap into those 1 billion Facebook users like it did before. On the otherhand, Zynga no longer has to pay Facebook a 30% cut of revenues generated on Facebook. Zynga game apps no longer run on the Facebook platform, but it provides a link to the new Zynga.com social gaming site. I looked earlier today, and there were 1.5 million gamers online.
Courtesy of an article dated March 22, 2013 appearing in ValueWalk
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