Zynga Begins to Build Its zForces
Social butterfly Zynga (NAS: ZNGA) sure must be sick of its loveless marriage with soon-to-be public social kingpin Facebook. It's slowly inching closer to the day that it can unfriend the massive networker, starting with the launch of its own gaming platform on Zynga.com.
Further bolstering its autonomy and independence, the game maker also recently disclosed that it is weaning itself off Amazon.com's (NAS: AMZN) Web Services hosting offerings and transitioning to its own data-center infrastructure, dubbed Z Cloud. It's been investing heavily in servers but will still count on AWS for a chunk of its hosting needs.
Zynga's platform still relies on Facebook Credits as the virtual currency, so it's not quite ready to go it alone yet. But you can be assured that it wants to. There's no other reason for the company to make such a major initiative, and at very least it would give it more bargaining power with Facebook when the pair's revenue-split agreement expires in May 2015.
An important aspect of the platform is that it will include support beyond Zynga's own games and be available for third-party game developers to tap into Zynga's growing user base. The company has now announced that it's landed three early developer backers: Konami (NYS: KNM) , Rebellion, and Playdemic.
Konami is the most recognizable in the bunch; its well-known franchises include Metal Gear Solid and Contra, and it has made its social ambitions clear in recent years. The other game makers are less well-known, but the more developers that Zynga can herd into its FarmVille-esque stable, the more likely it becomes that it can eventually reduce its reliance on Facebook's floundering gaming platform and become a platform operator.
Who will be next to join its forces? Would Activision Blizzard (NAS: ATVI) ever consider bringing its wildly popular Call of Duty franchise over so social gamers could mercilessly slaughter their zFriends? How about seeing Take-Two Interactive (NAS: TTWO) include its smash-hit franchise Grand Theft Auto so those same gamers could, um, mercilessly slaughter their zFriends?
Those would be some juicy scores for Zynga, but the real game-changer would be online gambling. There are loads of red tape to navigate to make Zynga Poker a real-cash affair, but if it does I'd seriously consider giving Zynga an outperform CAPScall, a contrast to the red thumb it now sits next to on my scorecard.
Until then, Zynga is still a Faker Breaker. Faker Breakers don't have good odds of scoring multibagger returns -- Rule Breakers do. If you really want to discover the next rule-breaking multibagger, don't miss this new special free report that names a company that's been recommended multiple times. While Zynga has five out of six signs of a Faker Breaker, this company has all six signs of a Rule Breaker, and I own it in my personal portfolio. Get the free report now.
At the time this article was published Fool contributorEvan Niuowns shares of Amazon.com, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Amazon.com and Activision Blizzard and has written calls on Activision Blizzard.Motley Fool newsletter serviceshave recommended buying shares of Activision Blizzard, Amazon.com, and Take-Two Interactive Software and creating a synthetic long position in Activision Blizzard. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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