There was a time when you couldn't talk about Facebook (NASDAQ: FB) without bringing up Zynga (NASDAQ:ZNGA), particularly in the context of its gaming platform and growing payments business. The two have begun to distance themselves from each other in recent times, though, as the honeymoon glow has been in the process of fading for years. Given the asymmetrical nature of their relationship, that's not entirely surprising.
Two years ago, 93% of Zynga's total revenue was being generated on Facebook's desktop platform, and the social network's cut of all those virtual tractors, along with direct ads that Zynga purchases, accounted for 13% of Facebook's top line. Those respective figures have now fallen to "just" 76% and 7%.
Since Zynga recently fell below the 10% threshold, Facebook doesn't even mention the game maker in its SEC filings anymore. Its last disclosure was for the fourth quarter.
It's also true that Facebook's average payments revenue per user has stagnated, even though the segment's total revenue continues to climb, albeit at a slower pace than before. Worldwide payments ARPU now stands at $0.20, in line with 2011 levels.
There had also been a report last year from IHS iSuppli that believed Facebook's gaming user base had hit a ceiling, in part because casual gamers were quickly shifting to mobile platforms (where Facebook doesn't get a cut). More recently, Facebook is even making some moves to become a game publisher like Zynga.
With all of this in mind, investors might not think that Facebook's gaming platform is all that significant to the social networks future, but Facebook gaming exec Sean Ryan tells CNET that's not the case.
Beyond direct payments revenue, Facebook also enjoys ad sales to game developers looking to get into desktop and mobile News Feeds to reach users. For Facebook's large user base of casual gamers, which is now 250 million strong, games are another way to increase their engagement with the site, spending more time on Facebook and reinforcing the core advertising business even more. The figures that Facebook reports directly for its payments business are just part of the bigger picture. As Zynga continues to struggle, Facebook's gaming platform is doing just fine.
Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.