Latest S-1 amendment shows Zynga and Facebook untangling their finances
Facebook’s latest amendment to its S-1 filing reveals Zynga accounted for 4 percent less of the social network’s revenue, showing that both Zynga and Facebook are becoming less financially dependent on one another.
Although Zynga makes up a smaller percentage of revenue during Q1 2012 than it did during the same period in 2011, this quarter saw the developer generate over $20 million more for Facebook. In Q1 2011, Zynga directly contributed about $95.03 million to the social network, while this quarter saw Zynga provide about $116.38 million, not including revenue from ads displayed on app pages.
As to why Zynga makes up slightly less than what it used to of Facebook revenues, there are some obvious explanations. For starters, Zynga doesn’t have a CityVille-sized blockbuster release lined up for the quarter compared to the start of 2011. Another factor may be that the developer is spacing out game releases by quarter. Recall that Zynga didn’t release any new games after CityVille until the summer and despite releasing several games between Q2 and Q3, daily active users sagged.
Another obvious explanation is that Zynga is relying less on Facebook now than it did a year ago to drive revenue. Mobile games in particular are an area where Zynga continues to expand, starting 2012 with 15 million DAU and the recent OMGPOP acquisition likely boosting that number. The developer is also pursuing new platforms like Google+, Tencent and its own Zynga.com, although the latter is deeply integrated with Facebook. Despite using Facebook Credits as the sole means of transactions on Zynga.com, it is possible for the platform to cut into Facebook’s advertising revenue from ads viewed on Zynga app pages — assuming Zynga is able to lure users away from the social network to its own platform.