With Facebook's major gaming revenue source faltering and social gaming in general struggling to find new ways to engage and earn without annoying, it's no wonder Facebook founder Mark Zuckerberg isn't happy with the state of gaming on his massive social network.
During yesterday's earnings call as reported by TechCrunch, Zuckerberg came right out and said it: "Gaming on Facebook isn't doing as well as I'd like." The main reason behind the statement was the troubled Zynga. Last year the company was responsible for 62 percent of Facebook's payments revenue—12 percent of Facebook's overall revenue. This year the numbers have dropped to 40 percent and 7 percent respectively. That's a rather massive drop.
As Zynga struggles, other social game developers are stepping up their game, with companies like Kixeye, King.com and Wooga moving in to make up for Zynga's losses.
He went on, "But the reality is that there are actually two different stories playing out here. On the one hand, our payments revenue [from Zynga] decreased by 20% this quarter compared to last year. But the interesting thing is that the rest of the games ecosystem has actually been growing. 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."
It's another sign that social gaming as a whole is evolving beyond the template Zynga established. Hopefully the FarmVille company can keep up. If not, there's plenty of competition ready to take its place.