Zynga-Facebook Agreement Included Targets For Mobile User Growth
Of the many revelations that came out of Zynga’s amendment to its IPO filing yesterday, there were a few that related to the social gaming company’s mobile apps. Zynga added more documents to its filing yesterday including parts of a key five-year agreement it made with Facebook in May of last year. This was the contract that finally committed the social gaming giant to using Credits as a payment method and giving up a 30 percent revenue share to Facebook.
- Facebook and Zynga agreed to to set growth targets for monthly unique users of the company’s mobile apps every quarter through 2015. These came on top of growth targets for its users on the web. We don’t know the exact figures because they were redacted. As part of the agreement, Zynga reports its monthly uniques to Facebook every quarter and the two companies have a review session to evaluate progress and their relationship. If those targets aren’t met, then both companies appear to have the right to terminate their agreement (although part of that clause is redacted too).
- Zynga also agreed to exclusively use Facebook as the sole social platform in its mobile apps. This suggests that Facebook had different terms with other social gaming companies on their mobile apps. Crowdstar, for example, is using OpenFeint as the social platform in its game Top Girl instead of Facebook, implying it probably didn’t have an exclusivity clause in its five-year deal with the company.
- Users that Zynga gains through acquisitions, like its purchase of Words With Friends-maker Newtoy, don’t count for the mobile growth targets.
- The agreement looks like it predates Facebook’s shift to an HTML5-heavy strategy for building mobile applications and more importantly, a platform for third-party mobile developers. It doesn’t really include any references to HTML5.
Ultimately, it’s hard to tell how much this agreement delivered for Zynga in terms of mobile users as the company didn’t break out monthly uniques by platform. When Zynga filed for its IPO on July 1, it said it had 148 million monthly unique users. Monthly unique users (or MUU) is a preferred term because it doesn’t double count players who use more than one game on the Facebook platform.
Zynga said that the number of daily active users for its mobile games grew by tenfold between November of last year and June, but this was probably mostly because of the Newtoy acquisition.