Google has picked up a massive stake in social game developer Zynga, said by Epic Games to “PC gaming’s last hope,” and is said to be creating its own Google Games division for a foray into the gaming industry.
The move has seen “several hundred million dollars” in direct investment in social gaming powerhouse Zynga made by Google, which has also begun openly recruiting for staff to head a games division.
Zynga themselves are noted for the Facebook embedded game FarmVille and a number of other derivative browser games, as well as a variety of highly unethical advertising practices, making them ideal bedfellows for Google.
One source goes into detail:
Zynga will be the cornerstone of a new Google Games to launch later this year, say multiple sources. Not only will Zynga’s games give Google Games a solid base of social games to build on, but it will also give Google the beginning of a true social graph as users log into Google to play the games.
And I wouldn’t be surprised to see PayPal being replaced with Google Checkout as the primary payment option. Zynga is supposedly PayPal’s biggest single customer, and Google is always looking for ways to make Google Checkout relevant.
And there’s more. These same sources are saying that Zynga’s revenues for the first half of 2010 will be a stunning $350 million, half of which is operating profit. Zynga is projecting at least $1.0 billion in revenue in 2011, say our sources. This blows previous estimates out of the water.
Zynga continues to work on high level strategic business development deals. The reason these deals are so attractive to companies like Yahoo and now Google is this – Zynga allows them to rebuild the massive social graph, currently controlled by Facebook.
For whatever reason people love to play these games and get passionately addicted to them, coming back day after day. That’s helped Facebook become what it is today. Google, Yahoo and others want some of that magic to rub off on them, too.
Although Google’s immediate entry into the games market is likely to bring nothing but vast numbers of crude browser game designed to hook casual web gamers, it is notable that the company currently develops the operating system for some of the most powerful smart phones, and soon pad computers, on the market.
It would not be far-fetched for them to be considering a Microsoft-esque lateral move into the videogame market, starting with Android-based mobile devices, although a torrent of awful browser games seems the surest bet.