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Mark Zuckerburg thinks Facebook gaming could be doing a lot better. TechCrunch reports the founder and CEO of the world's largest social media platform touched on Facebook games and the company's former reliance on Zynga in its earnings call yesterday.
Total payments revenue, largely derived from in-game purchases, declined by 9 percent from $192 million in the second quarter to $176 in the third. While payment revenue is up 13 percent from the same period last year, the growing strength of mobile is likely cutting down Facebook gaming's profitability.
Facebook's gaming revenue from Zynga has declined by 20 percent since last year, and Zynga laid off 5 percent of its full time workforce and closed its Boston studio yesterday as part of cost-cutting measures. While Zynga is suffering, competitors like Kixeye and King.com are gaining marketshare--and it's all the same money to Facebook, as long as the games are properly monetized.
"But the interesting thing is that the rest of the games ecosystem has actually been growing," Zuckerberg said. "Our monthly payments revenue from the rest of the ecosystem increased 40% over the past year, since payments has been adopted. This evolution is pretty encouraging.”
235 million people on Facebook play games, a decent increase from the 205 million reported last summer. But proportionally less of Facebook's users are playing games, as the service has grown from 750 million to 1 million users in the same time frame. Many of those users access Facebook through phones which cannot be used for the service's selection of browser-based games.
For more ideas on why the cash bonanza of Facebook games may have peaked, check out our 8 reasons why social gaming's gold rush is drying up.