Zynga Swallows The Facebook Credits Pill Whole

Wednesday, September 8th, 2010

J. Michael Arrington (born March 13, 1970 in Huntington Beach, California) is a serial entrepreneur and the founder of TechCrunch, a blog covering startups and technology news. Arrington attended Claremont McKenna College (BA Economics, 1992) and Stanford Law School (JD, 1995), and practiced as a corporate and securities lawyer at two law firms: O’Melveny & Myers and Wilson Sonsini Goodrich... → Learn More

In May Zynga and Facebook ended their months long fight and entered into a five year deal to use Facebook Credits as the primary monetization engine for Zynga games on the Facebook platform.

Zynga began rolling out Facebook Credits on some of its games months ago. But now they’ve made Facebook Credits the primary payment solution on all of their games across the Facebook platform other than Poker and a few other smaller games. Users can wire transfer cash, or use Facebook Credits, but that’s it. Other third party payment providers have been removed.

The migration has clearly had bumps – a slew of Zynga users are screaming murder in the forums over various payments failures. Which makes sense since Zynga is almost certainly accounting for the lion’s share of the Facebook Credits business.

One thing to note – Don’t expect to see Facebook Credits being rolled out in Zynga’s games on other platforms like Yahoo. Zynga and Facebook have found détente for now, but I don’t see Zynga processing a single dollar through Facebook that they don’t have to.

Zynga and Facebook’s joint statement: “Facebook and Zynga have transitioned Facebook Credits to be the exclusive method of payment for most Zynga network games on the Facebook platform. The companies are committed to working together to provide the best possible customer experience during this transition.”

Update: To clarify, Poker and the rest of Zynga’s games on the Facebook platform will eventually use FB credits, too.

Company: Zynga
Website: zynga.com
Funding: $860M

Zynga was founded in July 2007 by Mark Pincus and is named for his late American Bulldog, Zinga. Loyal and spirited, Zinga’s name is a nod to a legendary African warrior queen. The early supporting founding team included Eric Schiermeyer, Michael Luxton, Justin Waldron, Kyle Stewart, Scott Dale, John Doerr, Steve Schoettler, Kevin Hagan, and Andrew Trader. Zynga’s mission is connecting the world through games. Everyday millions of people interact with their friends and express their unique personalities through our...

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Company: Facebook
Website: facebook.com
Launch Date: January 2, 2004
Funding: $2.34B

Facebook is the world’s largest social network, with over 500 million users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz and Chris Hughes to help build Facebook, and within four months, Facebook added 30 more college networks. The original idea for the term...

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