Today in Social

Last October, when social gaming leader Zynga started talking about “Project Z,” GigaOM Pro said it sounded like more than a gaming hub site or technology platform, but a distribution network for third-party games as well. Turns out we were right. Zynga hired a Sony publisher relations VP and has so far signed up a few small players. But that move, and possibly an increased focus on advertising, will be Zynga’s first steps toward Facebook independence. The bulk of Zynga’s revenues come from sales of virtual goods for which it pays Facebook’s 30 percent fee to use Facebook Credits. Zynga is still using Credits, and in fact Zynga’s hub and partners may expand Facebook Credits’ reach. Ryan Lawler cautions Zynga that being a platform is a tough business. He’s right, of course, and Zynga will have to prove the value of services like hosting, player matching, cross-promotion and distribution for its partners.

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David Card

VP Research Gigaom Research

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