Inside Social Games

Zynga said last week that it is beginning to test a new feature: SMS updates for its Facebook role-playing game Mafia Wars. A small portion of the game’s players can now receive text notifications about in-game activity on their mobile devices. We’ve gotten a few more details from the company about what’s going on here.

4Info, a provider of SMS advertising and publishing services, is the white-label SMS provider, Zynga tells us. For now, players can only receive notifications from the game, including ways of adjusting what sort of notifications you get, and when you get them. But they will eventually be able to take in-game actions via SMS, Zynga told TechCrunch last week.

It is possible that this is a way for Zynga to start to make its Facebook games more independent. Having a diverse user base is a good idea for any company, and something that public investors will want to see when Zynga decides to go public. The concept is worth examining.

How could Zynga use SMS to move beyond Facebook? People need to give Zynga their phone numbers in order to get the texts, and if people get used to playing the game from their phones or other devices, then maybe Zynga could take the user names and phone numbers and use both to create separate identities — and services — outside of Facebook.

However, Zynga is so far looking committed to building features for its games that rely Facebook to provide real-world identities and communication channels. Facebook, for now, is where the most distribution and revenue is.

The point of the SMS updates, at the moment, is to get users engaging more with the Facebook application. The feature may help boost usage as Facebook removes app-to-user notifications soon, although Zynga said it had been working on SMS integration before Facebook decided to make changes. SMS is a promising new channel, for other reasons, too: it helps people with weak internet connections access the game, and it is a proven way for users to buy virtual goods (for more on that, check out mobile payments companies like Zong and Boku). Facebook itself uses SMS to let users do things like get updates from their friends.

Here’s a look at other examples of Zynga relying on Facebook within off-site features. It has come out with a web browser toolbar for Mafia Wars, so players can keep track of the Facebook game while surfing the rest of the web. It has also been launching free-standing web sites for FarmVille and other Facebook apps that exclusively use Facebook Connect, meaning that users can only use these sites via their Facebook accounts. From everything we’ve heard, these sites are designed to give Zynga more space for features.

And, in terms of mobile, Zynga has launched five games for the iPhone: Mafia Wars, as well as Word Scramble, Live Poker, Vampires Bloodlust and Street Racing. Some of the others include Facebook Connect integration so you can sync your Facebook account and play against your Facebook friends on the device. However, after launching Mafia Wars months ago on the iPhone, the game still does not use Facebook Connect.

So, despite Zynga’s general focus on building for Facebook, could the ongoing lack of iPhone-Connect integration be a sign that the company is moving beyond it? Probably not, at least at this point. Zynga vice president Bill Mooney said at the DiscoveryBeat event earlier this fall that he decided to disconnect development of the Mafia Wars iPhone app from the development of the Facebook app because “the iPhone development cycle is too slow.” While Zynga updates its Facebook games twice a week, updates to its iPhone games must go through Apple’s iTunes App Store approval process, thus delaying deployment.

In other words, Zynga’s iPhone development — if not all other development — has been de-prioritized as it has worked on its Facebook games. The result this past year is that it grew from 5 million daily active users on Facebook to around 65 million. Meanwhile, its mobile presence has grown to between 5 million and 6 million daily active users, with much of that growth likely driven by the brand recognition it has gained through Facebook.

Zynga chief executive Mark Pincus has, in various interviews, talked about the importance of mobile. However, he also recently reiterated to us that social games are still in their formative stages of development. While social games contain some social features, many of the social interactions happen outside of the game, whether on Facebook or in real-life situations. Pincus expects Zynga to add more in-game social features in the future.

We expect Zynga to continue building out SMS services, iPhone apps, and other mobile and off-Facebook features, but we also expect it to continue to rely on Facebook as it makese these moves. So, in terms of the company’s focus on mobile, it is more likely that Zynga will add Facebook Connect to the Mafia Wars iPhone app than try to separate its Facebook users from their Facebook identities.

The reason is that Facebook identities closely follow real-life identities. As Mooney said at the conference, the problem with Zynga’s games on Facebook’s social network rival MySpace is that MySpace friends “are not your real friends.”

Zynga’s goal is to create social games, and for the time being it needs Facebook’s real users, communication channels, and open platform to do so — other platforms, including MySpace and the iPhone, don’t have all of these the components.

So, what Facebook offers, Zynga needs. Social features drive growth, in turn allowing Zynga to fully benefit from virtual goods payments its primary means of making money. While the iPhone now allows payments within free-to-play games, it does not yet have the sorts of social features that allow for the same magnitude of user discovery as Facebook (at least that we have seen to date). Unsurprisingly, when we asked Zynga about SMS and its other mobile plans, the company explained mobile as “a natural extension,” not as a way to escape Facebook.

While Facebook’s changes to notifications and other communication channels may slow Zynga’s growth, the core social value is still there.

[Zynga SMS image via TechCrunch]