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This article was published on June 4, 2013

Never mind Zynga: Facebook claims its last three months of game revenue are a record

Never mind Zynga: Facebook claims its last three months of game revenue are a record

Facebook has revealed a snapshot of the amount of activity games receive on its platform. While it has 250 million people playing games on Facebook monthly, the more impressive statistic was the fact that Q1 2013 was the social networking company’s best three-month quarter in terms of game revenue. Not only that, but it even saw a record number of people playing games on the site.

The reveal today comes as Zynga is seeing a startling shakeup inside its organization as it reduced its workforce by 18 percent in order to make “substantial cost reductions”. In doing so, it also shuttered its New York and Los Angeles offices to shift its focus to mobile.

Interestingly, developers on Facebook don’t seem to have that mobile-focus problem. According to a company spokesperson, this May, the company saw more developers begin launching cross-platform strategies for games to increase their user engagement. Companies like Playtika, Social Point, and King all began taking measures to ensure game play could be continued across desktop and mobile devices.

Facebook said that there are about 200 games right now on its site with more than 1 million active users each. To highlight Facebook’s influence in mobile gaming, the company said that 82 percent of the top grossing US 100 iOS game apps and 75 percent of the top grossing US 100 Android game apps are integrated with the social network.

Today, the top grossing game on Facebook and most Android and iOS stores is King’s “Candy Crush Saga”, which ousted Zynga’s “FarmVille 2” as the most popular game this January.

During its Q1 2013 earnings call, Facebook Chief Financial Officer David Ebersman says its payments revenue from games increased by 12 percent:

We believe 6 percent represents the best apples-to-apples comparison in terms of the increase for payments from games if we adjust for items such as the Q4 change in revenue recognition timing. We’re pleased that Q1 represented our largest three month quarter of games revenue to date, despite a 37 percent drop in year over year payments volume from our largest developer, as our other developers increased their payments volumes by almost 60 percent and we saw a record number of people playing games on Facebook.

Perhaps noteworthy, it was nearly seven months ago when Facebook and Zynga agreed to part ways when it came to serving ads, platforms, and virtual currency. At the time the social gaming company’s Chief Revenue Officer Barry Cottle said that the move was made to support Zynga’s mission to build “enduring relationships with consumers across all platforms from Facebook and on the web to tablets and mobile.” Ironic then that Zynga has seemingly faltered on that front while Facebook has been doing fairly well.

Even Facebook CEO Mark Zuckerberg didn’t hesitate to take a shot at Zynga during the last earnings call:

One thing that I think has actually gone well with platform recently is the gaming ecosystem. With the exception of our largest partner, Zynga, whose growth hasn’t been as awesome as everyone had hoped, the rest of the community is actually growing quite well and is quite healthy. We’re pretty happy with that, and it’s a pretty diverse group. We’re up to 81 of the top-grossing 100 iOS apps, and 70 of the top-grossing Android apps are connected in with Facebook, so we’re getting good coverage.

Photo credit: ROBYN BECK/AFP/Getty Images