Facebook’s New Terms: Treat Zynga Like Most Other Game Developers

Facebook and Zynga said today that they have revised a two-year-old contract, which will make the two companies’ relationship way less complicated.

The deal was originally agreed to in May 2010, and was partially disclosed when Zynga went public. The terms of the new agreement, which were disclosed in separate filings by Facebook and Zynga, are a lot less onerous for Zynga. It will also free up Facebook to make its own games, if it chooses.

The main points are:

  • Zynga will no longer be separately obligated to display Facebook ad units or implement Facebook credits on any Zynga game pages.
  • Facebook will no longer be the exclusive social platform for Zynga, allowing it to launch games first on mobile or its own Zynga.com platform (although the games will have to launch shortly after on Facebook).
  • Certain provisions related to Web and mobile growth targets and schedules will no longer be applicable, and Facebook will no longer be prohibited from developing its own games. Further, Zynga’s right to cross-promote between games on the Facebook Web site will be governed by Facebook’s standard terms of service.

I’m hearing that the new contract was negotiated between Facebook’s Dan Rose and Zynga’s new Chief Revenue Officer Barry Cottle.

In a statement, Cottle said: “Zynga’s mission is to connect the world through games. In order to do this, Zynga is focused on building enduring relationships with consumers across all platforms from Facebook and Zynga.com on the web to tablets and mobile. Our amended agreement with Facebook continues our long and successful partnership while also allowing us the flexibility to ensure the universal availability of our products and services.”

After reading the documents, it is clear that the new amendments are a reflection of how much the social gaming landscape has changed over the past two years.

Back when the contract was first signed, Facebook needed Zynga to help transition all developers on the platform over to Credits, which required everyone to give Facebook a 30 percent cut of all revenue. It’s now clear that the more important priority is for both Facebook and Zynga to be successful, which means less restrictive terms.

And while Zynga will be required to make any social game it launches available on Facebook concurrently, or shortly following, another launch, there are some exceptions: Provisions around gambling for real money, games in China and Japan, and mobile games due to technical limitations.

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