Public Offering Said to Be Unlikely for Zynga This Year
Though Facebook is indicating it will go public next year, one of its biggest partners does not want to take the plunge — at least not yet. — Zynga, the maker of online games like FarmVille and CityVille that are popular on Facebook …
Context & Ripple Effects
On January 10, 2011, DealBook reported that Zynga was said to be unlikely to go public this year — a reversal of earlier expectations — even as Facebook signaled it would list in 2012. Both data points were sourced as indications rather than filings, so neither company had committed on the record.
What makes the pairing analytically loaded is the confirmed structure underneath: Zynga's hits FarmVille and CityVille run on Facebook, making the game maker one of the platform's biggest partners. Two of social gaming's central companies were therefore weighing exits whose timing was entangled with each other.
First-order effects
- Zynga staying private through 2011 keeps a liquidity event off the table for its backers and employees despite CityVille-scale hits, while leaving the company's valuation unpriced by any public market.
- Facebook heads toward its own rumored 2012 listing without a public comparable among the developers that drive much of its engagement — its largest partner's worth remains an open question at precisely the moment its own would be set.
Second-order effects
- A Facebook IPO would hand Zynga the first hard pricing benchmark it has lacked, letting underwriters value a top platform-dependent publisher against a listed host instead of private guesses.
- Rival social-game studios watching both timelines face the same choice: file alongside the platform wave and accept dependence-based pricing, or wait for standalone metrics strong enough to justify a solo debut.
Third-order effects
- If platform-dependent publishers keep deferring listings until their host platform prices, social gaming's arrival in public markets becomes fundamentally an exercise in valuing distribution dependence rather than standalone game portfolios — a structural question regulators and index committees had not yet had to price.
The trend: Exit timing for social-game companies is becoming pegged to their host platform's own path to public markets, turning platform dependence into a valuation variable rather than a private detail.