Facebook and Zynga Going Steady
Yesterday, Zynga filled an addendum to its IPO which details its interesting and complicated relationship with Facebook. In short, they’re going to be working very closely for a while. Last summer, Zynga entered into a five-year exclusivity agreement with Facebook and language pertaining to that agreement was present in the original IPO, but it was chiefly concerned with currency dealings, specifically that Zynga agreed to use Facebook currency for its games and agreed to divvy up the profits with Facebook.
This new, massive (600 page) addendum broaches all kinds of other exclusivity concerns and makes it clear that Zynga is ready to work with Facebook for the long haul. According to the addendum, all Zynga games with Facebook support will be Facebook exclusive for the duration of the agreement. This not only affects the games Zynga has already developed, including flagship FarmVille, but will also apply to any further games developed and released on Facebook during the course of the agreement.
As if that wasn’t enough, it appears that while they’re not required to include Facebook support in all of their games, Zynga has agreed to ensure that Facebook-supported games require users to be signed on during the entire duration of play in addition to agreeing not to develop games for any rival social networking platforms. Although these terms are largely concerned with things Zynga will do for Facebook, the main service Facebook brings to the table is helping Zynga find users for their games . At face value, the proportion of agreements on Zynga’s side to those on Facebook’s may seem a little lopsided, but having Facebook push your product is a huge boon and enough to make the partnership worth it, apparently. Providing that Facebook stays on the top of its game, this agreement, regardless of its catches, stands to be extremely profitable for both parties. That is, assuming Google+ doesn’t take the social networking crown, but Google+ers don’t really seem like the FarmVille type anyway.
(Attempt to) Read the mammoth addendum in its entirety over at AllThingsD.