Zynga has suffered a dive after Facebook amended its agreement with the company. Under the agreement Facebook can now develop its own games. However, Facebook has said that at the moment it has no plans on making its own games.
Zynga’s problem is that it relies almost entirely on Facebook to distribute its games. It does look like Apple’s App Store and Google Play could be good alternatives, but consumers aren’t interested in paying for Zynga’s games, they enjoy the free-to-play content such as FarmVille and CityVille. If Zynga withdrew these games from Facebook then they would lose lots of free advertising.
In pre-market trading Zynga fell as much as 10%, the company’s most prominent decline since October.
Last month, in a reversal of fortune for the game developer, the company gained by more than 17%, however, much of this was lost with Friday’s announcement.
Overall things are looking fairly bleak for Zynga, the company is losing millions of players every month. They have also had to axe over 100 jobs by closing its Boston office and eliminating two-thirds of its employees in Austin.
Year-to-date the company has fallen in value by over 72%.