As Zynga falters, so does Facebook

Facebook CEO Mark Zuckerberg says the social network is not doing as well as he likes on gaming, and that relates directly to Zynga's performance.

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Players are spending 20 percent less on Zynga games, which means Facebook is receiving less money from those games as well.

"Overall, gaming on Facebook isn't doing as well as I'd like," Facebook CEO Mark Zuckerberg said during the company's third-quarter earnings conference call today. He said the rest of Facebook's gaming network has been growing -- monthly payments revenue from other games has increased by 40 percent since last year -- but Zynga's numbers have fallen.

Zynga's payment revenue has gone down 20 percent since last year's third-quarter earnings, Facebook's Chief Financial Officer David Ebersman said on the call today. Zynga's contributions account for 7 percent of the social network's revenue this year, which is down from 12 percent last year. The social gaming company represents 43 percent of Facebook's payments revenue.

Zynga's payment revenue isn't too surprising. The company, which reports its own third-quarter earnings tomorrow, has had a challenging year, with disappointing earnings last quarter and lowered expectations for this quarter.

Meanwhile, Zynga is laying off 5 percent of its workforce , with an office closure in Boston and proposed closures of the Japan and U.K. offices.

Updated at 5:13 p.m. PT: with more details.

 

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