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Zynga’s stealthy social network, Zynga Direct, could have games from third party game developers alongside Zynga’s own games, according to a few analysts we spoke with.If this happens, it will give Zynga access to a large number of new games, removing some pressure to constantly create new hit games.
Another company could make a hit game on the Zynga Direct platform, and then Zynga would take a slice of the revenue.
One of the biggest problems with Zynga is that it’s a hits driven business. When it slows its release or acquisition of new games, its growth slows, as we saw earlier this year.
If it can build Zynga Direct into a massive platform with millions of users, then open it up to other game companies, it would partially solve that problem.
That’s a big “if,” but it’s always best to be a platform. Just ask Facebook, or Twitter. It’s just not all that easy to pull off.
Anyway, we thought of this after asking a few analysts what they thought of Zynga Direct. Here are their takeaways:
Billy Pidgeon, analyst at M2 Research
- “If they’re doing their own portal like Yahoo! or Pogo, then typically other publishers cooperate there and do a revenue share, that’s just the way it’s always done,” Pidgeon said. “If you’re a small game developer, it would help to hook up with somebody like Zynga or Zynga’s competition.”
- “It’s a way to decentralize and centralize your games at the same time, there would be a Zynga portal and a centralized type of move that would allow people to play Zynga games anywhere,” he said. “You could drop a Zynga game into another portal — that could be Yahoo! or Pogo or anything — and provide some kind of layer like a high score on top of that.”
Michael Pachter, managing director at Wedbush Securities
- “Clearly, they want people to have the option of going to Zynga.com instead of Facebook.com, but there’s no indication what it will look like,” he said. Pachter said there was little chance the new service was a third-party publishing system because the company is still aggressively acquiring companies.
- “They are doing everything to bring publishing in-house, have been aggressively buying developers,” he said. “I presume he means let consumers have tools to become more engaged and to solicit their friends outside of Facebook to play.
Brian Blau, research director of consumer technology and marketing at Gartner
- “They’re gonna do everything they can to help extend the Facebook platform and make sure they have a life outside of Facebook,” he said. “We said one of the big troubles for them was their reliance on Facebook, if they didn’t make this move they would be limiting themselves and open the door for other big game vendors to come in.”
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