The relationship that is Facebook and Zynga, the social gaming company behind Mafia Wars and Farmville, has reportedly taken a turn for the worse. It's so bad that Zynga could theoretically leave Facebook. The fallout would be very interesting to watch.
TechCrunch's Michael Arrington reports that Zynga is fighting---umm negotiating---with Facebook over Facebook Credits, which takes a 30 percent cut of payments. Facebook also wants Zynga to cut a deal where it is primarily on its platform. Zynga would be stupid to tie its fate solely to Facebook and is now pondering its own social game network called Zynga Live.
Personally, I'd love to see this Facebook-Zynga relationship go nuclear. I'd also love to see Zynga pull out of Facebook completely. Why? There are two things that I find enjoyable: People watching---social networks are great Petri dishes---and pondering business models.
On the first front, it's clear that the primary objective for many folks on Facebook is to play games. As an academic exercise I wonder if people would be as active on Facebook without Farmville. I doubt it. Unfortunately, I don't play Farmville so don't really know how my own usage would change. But it's a safe bet that a Farmville-free Facebook would result in some user backlash. Maybe folks would even deactivate their accounts.
As for the business model, I'd like Zynga to pull out to see if another company fills the void. A Zynga departure would also give us an indicator on the health of Facebook's app economy. It would also be interesting to see how Zynga does without Facebook.
When you boil this complicated Facebook-Zynga dance down it's all about the money. In a perfect world, these two would just merge. Instead, Facebook is likely to try and compete with Zynga. Should be fun to watch.
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