Monday, December 3, 2012

Facebook Inc (NASDAQ:FB ) has the option to develop its own games - Zynga Inc(NASDAQ:ZNGA)

With Facebook Inc(NASDAQ:FB ) changing the terms of its agreement with game developer Zynga Inc(NASDAQ:ZNGA), speculation is rife that the social networking site may jump into creating games.

The regulatory filing made by the company said, "...effective on March 31, 2013, certain provisions related to web and mobile growth targets and schedules will no longer be applicable and Facebook will no longer be prohibited from developing its own games.”

The terms of the current agreement prohibited it from developing games so long as Zynga was there to do the work for it.

Of course, Facebook has denied it saying that it has no intention of getting into game development and stepping onto Zynga's turf. But then what is to stop the company from hiring experts in game development from any number of companies and developing games for its platform?

Apart from Zynga, Facebook also uses other game developers such as Woonga and King.com.

“We’re not in the business of building games and we have no plans to do so,” a Facebook spokesperson told AllThingsD. “We’re focused on being the platform where games and apps are built.”

What went exactly wrong between the two companies is difficult to say because Zynga's Farmville was one of the hottest properties on Facebook and still is - if users know where to find it now.

Facebook has been constantly tinkering with its platform and its Timeline feature makes it a little difficult for users to locate applications and games that they used to earlier easily.

In fact, Zynga was prone to blame its ally for the changes that made it difficult for users to find and play its games, leading to a slowdown in its revenue growth.

Even now, despite all that has happened, Zynga makes up a significant chunk of Facebook's payments business revenues.

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