Zynga is using less and less of Amazon’s cloud services and a new project would distance the company from Facebook.
Zynga has become synonymous with Facebook. The overwhelming majority of Facebook users also use Zynga. Despite the success that Zynga has had, partly because Facebook, the online gaming giant is looking to cut ties with the world’s most popular social networking site.
The company is looking to branch out and incorporate their services into other user bases. Zynga doesn’t want to leave Facebook completely; it recognizes the value of being an incorporated part of a website that has billions of registered users. However, if the new venture launches in March as rumors are saying, other developers will be able to attach themselves to Zynga games for greater visibility in the online gaming market.
As of right now, when you look at games on Zynga’s website, they’re only offered to play through Facebook, and for a few games, on Google+. If this speculated project comes to fruition, Zynga will develop and release fewer games and will instead pick and choose which games to invest in from other developers. According to unnamed sources, this new venture is called Project Z internally, short for Zynga Direct. The goal said CEO Mark Pincus is to create a more direct connection with users, which in turn will encourage them to spend more money on Zynga games.
We covered Zynga’s IPO when it happened a few months ago, from which the company made $1 billion. Although Facebook accounts for ninety percent of the company’s sales, it also takes a thirty percent cut of each sale. Nothing is officially confirmed yet. Sources reported that the finality of the new direction depends on partners that would create games that Zynga would advertise.
Despite Zynga’s desire to separate from Facebook, Zynga insiders say that Facebook will still get a cut of Zynga profits for the foreseeable future. Zynga games still operate based on Facebook Credits. Consequently, Facebook will take a percentage of all Facebook Credit transactions.
Zynga games account for six of the seven most popular games on Facebook and the company has 246 million users. The company released “Hidden Chronicles” last month and already has 30.7 million active users. The only two games that are more popular are “Texas Hold ‘Em Poker” and “CityVille.” It seems like working with Facebook hasn’t been a real detriment to their development, although as reported, it is hindering the company’s expansion.
In this new direction, Zynga would become just another video game publisher, instead of a game developer. The concept isn’t new to the world of video gaming, where big name companies such as Electronic Arts simply contract other companies to develop games that might not have ever made it into the public eye without big time brand support behind it.
All of this news comes just after Zynga released its earnings call and revealed just how much it’s been depending on its own private cloud infrastructure. Previously, Zynga directed a large chunk of its traffic to its cloud infrastructure in Amazon Web Services (AWS) but as of last week, Zynga shows that eighty percent of the company’s daily active users are now playing through zCloud, Zynga’s own private cloud, housed in the company’s own private data center. It looks like the company doesn’t want to be dependent on too many people to make sure its services are supported the way Zynga wants them to be.
Of course, this colossal shift of infrastructure didn’t just happen over night. Zynga’s CTO of infrastructre, Allan Leinwand, said that this transition has been happening over the course of the past few years. The benefits, he was reported as saying, are that Zynga can optimize its own servers to fit the needs of online gaming exclusively. Since June 2011, every game Zynga has launched has been in zCloud. Only twenty percent of Zynga’s daily active users are handled by AWS.
To read more about Zynga and other social media IPOs that happened in 2011, check out our blog post “Social IPOs of 2011 in Retrospect.”