Zynga Made Up 15% Of Facebook Revenue In Q1 2012
Facebook’s reliance on social gaming company Zynga to drive in massive revenue for the company has actually decreased since 2011 with the company reporting that the social gaming platform made up just 15% of Facebook’s revenue in Q1 2012 compared to 19% in 2011.
Facebook receives 30% of the revenue Zynga draws from the social network by requiring that Zynga use Facebook credits to power its in-app purchasing system. While Zynga created Zynga.com and recently launched the site as an alternative destination for social gamers who do not necessarily want to log into their Facebook accounts, the company continues to use Facebook credits to power that site and users scores are still published through Facebook.com accounts.
The social network also earns money from Zynga as the company uses Facebook.com to market its products to customers. In 2011 Facebook collected 12% of its revenue from Zynga advertisements while Q1 2012 has watched that number fall to 11%. A partial drop in that number comes from the fact that Facebook received only 4% revenue from advertisers spots displayed on Zynga apps, down from 7% in 2011.
Zynga revenue numbers were revealed during Facebook’s revised registration statement to the U.S. Securities and Exchange Commission in which the company wrote:
“We may fail to maintain good relations with Zynga or Zynga may decide to reduce or cease its investments in games on the Facebook Platform.”
The statement continues:
“If the use of Zynga games on our Platform declines for these or other reasons, our financial results may be adversely affected.”
That final statement shows why Facebook has been so quick lately to push further into mobile advertising and other areas of revenue generation.