Article · ~12 min read

Is Zynga's Dependence on Facebook the Key to Its Success, Or Its Downfall?

Knowledge at Wharton · Knowledge at Wharton (The Wharton School, University of Pennsylvania) Free Intermediate

This is a concrete case study of what platform dependency actually looks like from inside the company: Zynga's own filings admitted that substantially all of its revenue and players came through Facebook, and that any change in that relationship would hurt the business. It also digs into why the obvious fix (just add a second platform) is not really safety, since you are still exposed to each partner. Use it to pressure test how honest you are being about how much of your business sits on one other company's decisions.

• A company can look successful and still be one policy change away from serious trouble if a single platform carries almost all its revenue and users.
• Splitting across two platforms is not real diversification: you are then exposed to conflicts with either one, not protected from both.
• The durable move is to convert platform reach into assets you own outright, or accept that acquisition or slow decline are the usual endings for pure dependence.