Facebook is now treating Zynga just like any other game developer, taking away special perks agreed upon at the height of Zynga's popularity. In exchange, Zynga is being granted certain freedoms on its own network.
Zynga has been getting special treatment from Facebook thanks to an agreement struck over two years ago, but it looks as if many of those perks are going away. On Thursday, both companies completed an amended agreement that takes away some of Zynga's (undisclosed) privileges, in exchange for a few freedoms that could help the companies eventually part ways. According to a filing with the SEC, Zynga's use of Facebook will "be governed solely by Facebook's standard terms and conditions for game developers," as opposed to the perks (likely related to revenue share) that it was getting before. In exchange, Zynga can now opt out of using Facebook's proprietary virtual currency system and ad network outside of the Facebook website: namely on Zynga's own network, Zynga.com. The amendment also throws out a clause that prevented Facebook from producing its own games, though a representative tells Reuters that the company has "no plans to do so." The original five-year agreement came at a time when a still-growing (and still privately-owned) Zynga was threatening to take its business elsewhere if Facebook didn't cave in to certain demands. The move could be mutually beneficial to both companies: Zynga can cut its ties to Facebook, and Facebook can stop giving perks to a developer that isn't delivering as much revenue as some of its competitors. Zynga investors, however, aren't happy: shares are down nearly 14 percent in after hours trading.
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