May 10

Zynga May Leave Facebook to Form New Social Gaming Network

Zynga games, the social gaming company that makes Mafia Wars, Farmville, Cafe World, YoVille, Pirates and many other Flash based games on Facebook could be gearing up to create it’s own social gaming network, Zynga Live.

One could argue that Zynga and Facebook have a kind of symbiotic relationship, Zynga needed Facebook to get millions of regular people to play their games (leading to a social gaming explosion) and Facebook has needed Zynga to bring millions of people back to Facebook on an incredibly regular basis. All this may change in the coming months.

According to TechCrunch, they have a source that says that Zynga CEO Mark Pincus hosted a company meeting that addressed the new Facebook Credits system and the formation of the new social gaming network, Pincus also said that negotiations with Facebook have turned to the worst. Zynga uses it’s own virtual currency in it’s games and it sees the new Facebook Credit system as little more than a protection racket with Facebook taking a fee of 30% for credits. Zynga has been slowly distancing itself from Facebook for sometime now, as evidenced by the creation of Farmville.com and the push to get users email addresses so they can communicate with the users outside of Facebook.

Apparently Facebook is also trying to get Zynga to agree to a long term contract that makes Facebook the primary platform for Zynga’s products. Facebook is playing hard ball with Zynga and it is reported that they have been punishing Zynga by shutting off notifications on the Zynga games and, allegedly, they have even threatened to shut down Zynga’s games all together.

I’m not sure what Facebook hopes to gain by pissing off Zynga, considering that Zynga announced on November 3rd, 2009 it had 100 million unique people playing their games each month. We will keep our eyes on this and report back if we hear anything new. If you are a Zynga customer and you are finding the service erratic at the moment, bear with them, it might not be their fault. It could be Big ‘Facebook’ Brother punishing them again.