Facebook Says Gamers Paying to Play Surges 24 Percent

Facebook Inc. (FB) (FB)’s social-gaming empire is growing.

The social-networking website, which has more than 1 billion members, said the number of people paying to play games on its service rose 24 percent from a year ago, according to an e-mailed statement. Desktop-game users on the site jumped to more than 250 million from 235 million in October. The company paid a total of $2 billion to developers in 2012.

Facebook Chief Executive Officer Mark Zuckerberg is taking steps to improve the gaming experience by encouraging more developers to join the site after previously depending largely on Zynga Inc. (ZNGA) to bring in people who want to play. The executive has spent recent years striving to win back users who initially were alienated by the sometimes intrusive ways game makers could market and distribute their wares.

“This is an important category for Facebook,” Sean Ryan, Facebook’s director of game partnerships, said yesterday at the Game Developers Conference in San Francisco. “It’s good for Facebook. It’s good for users.”

The company takes a percentage of the fees paid by users to game companies and garners revenue from developers that use advertising to boost exposure on the service.

Photographer: Berliner Verlag/Archiv/picture-alliance/dpa/AP Images

Numerous game pieces are pictured next to the Facebook logo. Close

Numerous game pieces are pictured next to the Facebook logo.

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Photographer: Berliner Verlag/Archiv/picture-alliance/dpa/AP Images

Numerous game pieces are pictured next to the Facebook logo.

More than 100 developers generated more than $1 million each in revenue on Facebook last year, the company said, and most of the top developers received record revenue from payments.

Dinner Meeting

Zuckerberg and Ryan held a dinner meeting in late 2012 with executives from top makers of social games to discuss ways to increase usage and sales on the social network, people with direct knowledge of the matter said in November. No representatives of Zynga were present, the people said.

Zynga, an early beneficiary of Facebook’s gaming platform, aggressively marketed its titles, and some users grew unhappy with the barrage of marketing from its programs, such as “FarmVille.” More recently, Facebook has distanced itself from Zynga and tried to emphasize a greater variety of games. It’s also put stricter controls on how much developers can market to users.

“If you’ve got games that are a little bit different from what’s out there, we’re happy to figure out how to make the platform work for you,” Ryan said. “The diversity continues to grow on the platform.”

Shares of the Menlo Park, California-based company fell less than 1 percent to $24.99 at 9:50 a.m. in New York. Through yesterday, the shares had fallen 34 percent since Facebook’s initial public offering in May.

Photographer: David Paul Morris/Bloomberg

The Zynga Inc. FarmVille game is displayed for a photograph on the Facebook Inc. website on a computer monitor in San Francisco. More recently, Facebook has distanced itself from Zynga and tried to emphasize a greater variety of games. Close

The Zynga Inc. FarmVille game is displayed for a photograph on the Facebook Inc.... Read More

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Photographer: David Paul Morris/Bloomberg

The Zynga Inc. FarmVille game is displayed for a photograph on the Facebook Inc. website on a computer monitor in San Francisco. More recently, Facebook has distanced itself from Zynga and tried to emphasize a greater variety of games.

Separately, the company said it’s expanding Facebook Exchange, a service that lets advertisers target users based on their Web-browsing history. Until now, such ads could only be placed along the right-hand side of home pages for desktop users. Now, these ads can be placed in the main News Feed, where members see postings from friends and brands they follow.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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