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No more fun and games for Zynga as Facebook cuts apron strings

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Zynga can no longer cream off users from Facebook, after Mark Zuckerberg's company revised a lucrative deal the games outfit once had with the network.

According to a US regulatory filing, Facebook has backed out of a very chummy agreement it had in place with Zynga since December 2010.

It's likely that Facebook has lost faith in the online gaming firm, which trades on Wall Street. After all, the original deal stated that it could only stay in place if certain conditions relating to growth targets for monthly unique users of a number of Zynga games could be met.

As of Facebook's initial public offering in May this year, it was revealed that Zuck's company derived 12 per cent of all its 2011 revenue from Zynga.

By July this year, that close partnership appeared to be coming unstuck when Zynga's boss Mark Pincus began to publicly grumble about Facebook after the network opened up its platform to rival online game outfits.

And soon Zynga will no longer be able to tap into Facebook's 1 billion-strong userbase to try and shunt people over to its games such as Words With Friends and Farmville from the site.

Facebook told US Securities and Exchange Commission regulators on Thursday that it had freed up Zynga from having to use its payments system. It said the company may also elect not to display ads served by Facebook.

It continued to sever the apron strings by stating:

Zynga’s use of the Facebook platform with respect to Zynga sites will, subject to certain transition provisions, be governed solely by Facebook’s standard terms and conditions for game developers.

In addition, Amendment to Addendum No. 2 implements a requirement that, subject to certain exceptions, Zynga must launch new social games on the Facebook site concurrent with, or shortly following, any launch on Zynga sites or third-party social platforms, and eliminates the requirement that Zynga use the Facebook platform as its primary non-Zynga platform to launch social games. Amendment to Addendum No. 2 also removes the requirement for Zynga to use the Facebook platform as the exclusive means of login with respect to games not hosted on the Facebook site.

Zynga confirmed that its distancing from Facebook would take place at the end of March 2013 in a move that could help the gaming outfit's rivals increase their sales via the network.

Pincus's firm does have its own Zynga.com platform, but it will arguably soon become more difficult to lure people over to that site once it's heavy dependence on Facebook is a thing of the past. ®

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