Zynga to Launch Its Own Game Space, Plays Down Impact on Facebook

(Reuters) – Zynga Inc. is launching a new games service that allows users to play on the company’s website instead of Facebook, potentially driving traffic away from the world’s No. 1 social network that is its biggest partner.

The service is the online game company’s boldest move yet to create a presence outside of Facebook, where it makes 93 percent of its revenue.

Zynga’s re-designed website, which will come online later in March, makes it easier to play games more quickly with access to live chatting and message board features where players can ask for help.

Five of Zynga’s top games will be on the new Zynga.com, including “CastleVille,” “CityVille” and “Words with Friends,” the company said on Thursday.

“Best of all, while you might like gaming and playing with people who like social games, they don’t have to be part of your Facebook friends list,” Zynga Chief Operating Officer John Schappert said in an interview.

However, he said the so-called Zynga Platform is closely tied to Facebook and users still need to log in using their Facebook IDs. All sales from virtual goods in games, such as houses or other items, will be traded using Facebook Credits, the social website’s payment system, he added.

Facebook, which has 845 million users, keeps 30% of revenue generated from Facebook credits. Zynga executives declined to comment on whether the company would ever sell items on its platform without paying Facebook a cut.

Manuel Bronstein, general manager of Zynga.com, said the new website is not intended to migrate users away from Facebook. It will help users keep their Facebook profiles separate from their gaming habits, while giving Zynga a closer relationship with its users, he said.

“If they want to play on Facebook, if they play on mobile, if they play on the Web, I want them to be connected to Zynga and it cannot be constrained to one single destination,” Bronstein said.

Playing games made by Zynga and Electronic Arts is one of the most popular activities for users on Facebook.

Zynga’s new website will also host games from other companies, which is a potential revenue stream. These include Orlando, Florida-based Row Sham Bow, which makes a Facebook game called “Woodland Heroes,” as well as the San Diego-based company Mobscience, which makes the Facebook game “Coffee Bar.”

Bronstein said the platform brings Zynga, which went public late December, closer to its goal of having 1 billion users. It has 240 million monthly users. The service will come out in 16 languages including Chinese, Korean, Japanese and German and will not be on mobile devices yet.

Facebook, which plans to raise $5 billion in an initial public offering expected to value the company at $75 billion to $100 billion, said in a filing in February that 12% of its revenue comes from Zynga.

Zynga shares rose 66 cents, or 5 percent, to $13.83 at mid-afternoon.

By Liana B. Baker, Reuters

Image credit: Facebook concept photo courtesy of Shutterstock

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