Game developer Zynga Inc(NASDAQ:ZNGA) will have to move to mobile gaming and surpass its long-time partner Facebook Inc(NASDAQ:FB) if it has to ensure its continual survival.
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The Farmville game creator, which is now dependent on social networking site for a significant chunk of its revenues, has to look for alternative revenue streams as it faces dwindling interest from Facebook users.
In the June quarter Zynga's earnings were hit as Facebook's introduction of the `Timeline' feature and its changed search algorithm made it harder for users to find existing games - mostly made by Zynga.
There has been criticism that the new format on Facebook diverts traffic to newer games and users are unable to play their old favourites with the same ease that they used to before.
Realising the gravity of the situation and also the fact that it can no longer pin its fortunes on Facebook - which itself is floundering with slowing revenue growth - Zynga is now looking at developing games for mobile devices and reducing its dependence on the social network.
With more subscribers taking to mobile devices for work and entertainment, it makes sense for the company to also shift its attention there. In fact its ally Facebook has also realised the importance of the mobile space and is trying to find ways to monetise its mobile user-base and get more revenues from there.
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Zynga has already made inroads into the mobile space by selling games, specifically meant for the mobile community and that can be played on a standalone basis.
Incidentally, in the mobile space, Facebook and Zynga might well find themselves pitted against each other as they fight for supremacy on the smaller screen-space.