Zynga Launches Standalone Game Site, Sheds Light On Virtual Goods Business

Seemingly unfazed by a looming class-action lawsuit triggered by allegations of misleading ads, social gamer Zynga has launched FarmVille.com, its first standalone game site. Previously, players had to be fully logged in to Facebook or MySpace to play a Zynga game; the new FarmVille.com site uses Facebook Connect to get players logged in, without forcing them actually “be” on the social network.

And it could signal the next trend in social gaming, with companies like Zynga initially using the networks to attract users — FarmVille garnered 65 million users overall from Facebook, with 26 million playing daily — and then launching standalone sites with more functionality, and potentially less restrictions on content and ads.

For example, Facebook banned Zynga’s newest game, FishVille, saying that the game’s offer-based ads were in violation of the social network’s terms and conditions. The game has since been reinstated, but if FishVille had a standalone site, then Zynga may have been able to get players back in the game much faster. (We’ve pinged Facebook to discern whether an app that the network has banned still retains Facebook Connect privileges).

In addition to having more control over the content and ads that gamers can see, building standalone game sites also gives social gaming companies the potential to launch their own, cross-game virtual currencies. Zynga says roughly a million users purchase virtual goods in its games every month, with direct purchases making up about 90 percent of its revenues overall. But it’s a fragmented revenue stream, since players’ payments need to be processed across multiple social networks and payment platforms.

Creating a universal game login and virtual currency would make it much easier for Zynga (and other social gamers) to process the transactions — not to mention get players to spend more on virtual goods — since the extra step of entering credit or debit card info is often all it takes to get someone to reconsider whether they really want to buy a new FarmVille tractor. Meanwhile, Facebook has never publicly stated whether it extracts a rev-share from app developers that make money from virtual goods or other micro-transaction sales, but if it does start charging, social gamers like Zynga could also potentially side-step the rev-share by using a payment platform that’s hosted on their own group of game sites.