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Facebook is feeling the impact of Zynga's troubles

Zynga's ongoing financial troubles are starting to have larger repercussions throughout the social game space, as Facebook CEO Mark Zuckerberg noted that Facebook gaming isn't doing as well as he'd like.
It seems Facebook is starting to feel the impact of some major changes in the social game space, as company CEO Mark Zuckerberg said today that he isn't too pleased with the way social games are performing on the major social network. "Gaming on Facebook isn't doing as well as I’d like," Zuckerberg said during an investor conference call. Much of those troubles are coming from struggling social giant Zynga, he said, as Facebook's gaming revenues from the company have declined 20 percent year over year, TechCrunch reports. With one of social gaming's biggest companies facing severe financial turmoil, Facebook's overall business has also taken a notable hit. Facebook's payments and fees revenue, for instance, declined 9 percent quarter over quarter to $176 million. This is the first major decline these revenues have seen in quite some time, and it's clear that at least some of this dip is the result of the ongoing troubles in the social market. These past few months haven't been very kind to Zynga, as its own revenues have fallen far short of expectations and players have left its games in droves. Those troubles got even worse today, as the company laid off over 100 employees and shut down its Boston studio. Zynga has traditionally played a huge role in Facebook's overall performance, but the social network doesn't have all its hopes pinned on the struggling FarmVille developer. Zuckerberg said that smaller social game companies like Kixeye, Wooga, and King.com are gaining marketshare and have somewhat made up for Zynga's declines. Of course, Zynga isn't the only thing that's changed in the social space of late. Major companies like EA are also struggling to hold onto their Facebook players, and analysts believe that in many cases players are moving away from social networks and are instead embracing mobile platforms. For now, it seems Facebook plans to favor those smaller, mid-core developers in the hopes that their growing and highly-engaged audiences will support the Facebook game market in the months ahead.

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