As Facebook posts a $157 million loss, CrowdStar claims the 'writing is on the wall' for games on the social network
Speaking to Bloomberg in response to Facebook's $157 million loss in Q2, Relan said the social network remains unable to get to grips with users transitioning to its mobile version, leaving studios that depend on the original web edition high and dry.
Facing the facts
"Facebook's biggest challenge this year has been figuring out the transition to mobile - they're seeing users flock from Facebook.com to its mobile app," said Relan.
"There is the obvious advertising problem on mobile. However, there's also a huge technological problem which is: games cannot be embedded in Facebook's mobile app.
"As a result, Apple and Google are stepping in and driving the revenues of mobile games on the App Store and Google Marketplace."
As a result, Relan said 'irrational investor panic' is the main cause behind a 70 percent drop in Zynga's stock, with those with cash to invest looking to cut ties with developers too reliant on Facebook.
Indeed, CrowdStar dropped all development on games for Facebook.com in favour of a focus on smartphones back in April, though the company is still utilising the recently launched App Center for mobile.
"We also partnered with Facebook using their new App Center but haven't seen enough uptake yet to declare that Facebook has cracked mobile," added Relan.
"The majority of downloads were driven through Apples ecosystem. We think that in the next game launch we will see better results: Facebook is very focused on this right now."
As such, Relan claims quite plainly that Apple remains the clear leader in mobile apps.
"Apple paid out $1.5 billion to mobile developers just last quarter," he concluded.
"That's more than Zynga's annual revenue. When paired with Zynga's recent earnings report, the writing is really on the wall as to where social gaming is heading: mobile."
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