Zynga, Facebook Sign Mutual Nonaggression Pact, UN Observers Deploy To Farmville

Zynga and Facebook step back from the brink of nuclear war (not my words!)

Defusing a tense equivalent of a nuclear standoff in social games, Facebook and Zynga announced today that they have entered into a five-year strategic relationship that ensures mutual support for social gaming on the world’s largest social network.

Under the agreement, Zynga will expand its use of Facebook’s virtual currency known as Facebook Credits. The companies were fighting about that because Facebook wants to make the currency a universal way to pay for virtual goods in apps across Facebook — and because Facebook wants a 30 percent cut of every transaction made with Facebook Credits.

The not-terribly-well-kept secret was that Zynga was preparing to launch a Facebook competitor of their own, Zynga Live, in response to Facebook’s attempt to graft themselves onto Facebook gaming’s monetary stream and Facebook’s ever-escalating privacy violations in the name of progress.

But now everyone loves each other! Hearts and flowers for everyone! (Click Hide to remove hearts and flowers from your feed.)

  • Zuzax

    Jebus wept.

  • Boanerges

    Uhm… Zynga vs Facebook. I think Facebook wins that one pretty readily.

  • http://blog.eldergoth.com/ Carson

    I lol’d at the fact that the ad server chose to serve me an Evony ad along with this article on my RSS feed.

  • http://geldonsgaming.blogspot.com geldonyetich

    I kept far away from Facebook until a few months ago when BYOND announced they had a page.  Hearing about Facebook’s recent privacy incursions, I wish I had kept my resolve.

  • Iconic

    I’m glad I’m not on Facebook, Friendster, or any of the other “look at me!” sites.
    I prefer to at least make our corporate overlords do a little bit of work in order to assemble their sophisticated marketing/spam profiles.
    Oh yea, Zynga is the devil, and the only reason Facebook was ever mad was because they didn’t think of it first.

  • http://www.mmomisanthrope.wordpress.com Dblade

    In other words, Zynga realizes no one would bother with a stand alone Farmville, and that 30% cut is better than losing money and folding with a start-up. Facebook gets a sweet cut of the profits, and makes indie developers lives a lot harder as they will have to ignore credits and try and push less extortionate payment plans, or go with them and lose serious profit.
    But hey, facebook is the wave of the future and stuff.

  • A Man In Black

    This will be remembered for decades as the Farmvillian Missile Crisis.

  • John Arras

    Dblade:
    In other words, Zynga realizes no one would bother with a stand alone Farmville, and that 30% cut is better than losing money and folding with a start-up..

     
    I’m pretty sure Zynga is paying a lot less than 30 percent. They will remain the kings of social gaming and everyone else will be at an X percent income disadvantage to Zynga on Facebook now.

  • Vetarnias

    And I was preaching in the wilderness all those years by saying we should stay away from those “social networking” tools.
    Now, I’m laughing, while you’re scrambling to remove those drunken party photos you’ve put up two years ago…  At least, if my privacy gets violated, I can go to court in full knowledge that I never agreed to it by overlooking one line of small print in a user agreement the length of the New Testament.

  • John Arras

    Oh wow, it looks like Zynga is paying the 30 percent. But, I still think there has to be something we’re not being told that makes it effectively less than 30 percent.

  • Aufero

    So Facebook has a five-year plan to collectivize Farmville?

  • http://www.muckbeast.com Michael Hartman

    “Zynga was making moves that suggested the relationship was getting sour because of Facebook’s changes to the platform, which caused virality to drop and forced Zynga to advertise more, which put more money in Facebook’s pockets.”
     
    In other words, expect more spam from Zynga games, as Zynga uses this relationship to once again be able to spam you (faster) into oblivion.
    This puts all other indie developers not only at a monetary disadvantage (since Zynga probably is not paying the full 30% cut), but a marketing one as well since other games won’t be able to spam as much as Zynga.
     

  • http://www.emcouncil.org/ Morgan Ramsay

     

    Boanerges: Uhm… Zynga vs Facebook. I think Facebook wins that one pretty readily.

    Zynga has a great deal of bargaining power as the largest developer of games for the Facebook platform. Zynga has 9 institutional investors, over 1,000 employees, and brings in more than $450M per year (2010 est.) Although Facebook is a significantly larger company, Facebook did not become the company it is today by shrugging off its most critical stakeholders. “Winning” often requires taking a long view.
     
     

    John Arras: Oh wow, it looks like Zynga is paying the 30 percent. But, I still think there has to be something we’re not being told that makes it effectively less than 30 percent.

    According to the Gamasutra article, Facebook will retain its 30% transaction fee; however, Facebook will direct all revenue from such fee to developing the platform. Sheryl Sandberg, COO at Facebook, explained that the purpose of the agreement is “to enhance the experience for Facebook users who play Zynga games.” The press release indicates that the terms of the agreement have not been disclosed. In my opinion, enhancements to the platform will benefit other social-game developers as well.
     

  • UnSub

    Is this where we all snort dismissively that FarmVille isn’t a ‘real game’ while adjusting our black berets and drinking red wine?

    The last thing Facebook needs, while it ambles towards a complete business model, is for one of its largest drivers to start up a competitor.

  • http://terranova.blogs.com greglas

    I’m getting tons of Evony ads from BT nowadays.  It’s wonderfully ironic.  I’m almost tempted to click on them just to redistribute wealth!

  • JuJutsu

    Oooh, I want a black beret. Is it a Broken Toys Cash shop item?

  • nerdgonebad

    The 30% cut is completely arbitrary and just following Apple’s example (a la iTunes).
    Couldn’t they come up with something snazzier than Facebooks Credits?  Maybe …Facebook Bucks, contracted down to f.u.c….ah, nvm.

  • Boanerges

    @Morgan
    Should have been more specific. Facebook vs Zynga Live… Facebook 1, Zynga 0
    Yes, Zynga is large and Facebook would be fools to let them go but trying to build a new social networking site is no small task vs the little company that could.

  • http://chrome.blogspot.com Chrome

    Any game made by Zynga is no different than this: http://progressquest.com/  Except progress quest is more fair and cheaper.

  • Hatch

    EVERY online game is some sort of progress quest.  Pointing out that MMOs have no ultimate point is not really news. Zynga chose to do the exact same thing, but in a way that advertises itself forcefully.  They they need now is farmville PVP and they’ll have everything that any other MMO has.

  • Mike

    Frontierville pvp ftw!