On the Facebook Menu at Zuckerberg’s Recent Dinner With Game Developers: Sushi and a Sliding Pay Scale
As mobile gaming gets hotter, Facebook is trying hard to keep more game developers, beyond Zynga, interested in its platform.
Last week, Facebook let its longtime dominant gaming partner Zynga out of a long-term contract that will allow the game developer more freedom to create games for other platforms. In turn, it levels the playing field for other developers, and should go a long way toward eliminating the fears of anyone on the platform getting special treatment.
That wooing has apparently included a dinner that Mark Zuckerberg recently hosted for the top brass in social gaming. Also present was Facebook games boss Sean Ryan.
The gathering included some of the top five to 10 social game companies on the platform, such as King.com, Kixeye, Disney’s Playdom, Electronic Arts and Kabam, and was held at the Fuki Sushi restaurant at Facebook’s new Silicon Valley headquarters. Facebook’s largest partner, Zynga, was not present, which is not particularly surprising for a partner it meets with essentially every week. Bloomberg also reported some details about the dinner last week.
A wide range of subjects was on the menu, sources said, with a lot of proposals and ideas floated. Developers did much of the talking, attendees said, with Zuckerberg and Ryan listening but making no promises.
One of the highlights was a discussion about new ways of monetizing games, including different revenue shares. Currently, Facebook charges 30 percent for virtual goods sold inside of games, just like Apple and Google. One idea was to have a sliding scale, so that developers just getting started on the platform would pay a lower rate, while the Zyngas of the world would continue to pay full price.
In other words, game developers would be taxed based on volume versus a flat fee, no matter how popular the game was. Likewise, the game execs argued that the rate structure would provide additional incentive to Facebook to market up-and-coming games.
A Facebook spokesperson was not immediately available for comment, but sources close to the company said that Facebook has no immediate plans to change the revenue share agreement for payments.
But the idea is not so far-fetched, given that most of Facebook’s payment revenue today is coming from a small percentage of large players. Specifically, Zynga contributed seven percent of the company’s Q3 payments revenue, down from 10 percent in Q2. Following that earnings report, Zuckerberg acknowledged: “Gaming on Facebook isn’t doing as well as I’d like.”
One thing Facebook could potentially do is build its own social games, which is now allowed, according to the contract it just signed with Zynga.
However, that idea was immediately shot down by a Facebook spokesperson: “We’re not in the business of building games, and we have no plans to do so. We’re focused on being the platform where games and apps are built.”
If Facebook is truly worried that a lot of its developers are ditching the social network for greener fields on Apple’s iOS or Google Play — and a lot of them are — then the dinner meeting was likely just the beginning.