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American Express is offering virtual rewards to Zynga players that use their service
Spending money in the real world could start benefitting your virtual farms now that Zynga and American Express are back together again. The new connection is a deal that gives prepaid card carriers ways to earn extra Farm Cash.
American Express, has been putting a lot of focus, lately, on small businesses, monetary returns and social media perks to get people to swipe their cards. Now they are looking at cash back of a virtual sort.
With a new platform called Serve, American Express hopes to services the Zynga demographic with various different methods -- from NFC to QR codes and even basic online payments.
Soon, FarmVille players will be able to plant an American Express-branded tree in their farms. Once their virtual tree is planted, they’ll be encouraged to register for a prepaid card and American Express’ Serve program and complete other tasks to get that tree to fruit some hefty virtual returns.
"We're thrilled to expand our relationship with Zynga and provide an easy way for players to earn Zynga virtual game cash by learning about Serve and signing up to receive the many benefits of our digital wallet," Dan Schulman, President of Enterprise Growth, American Express, said in a statement. "As the commerce landscape continues to change, and online and offline spending converges, Serve is focused on partnering with companies like Zynga to create unique value for our customers in the environments they love."
The first five purchases of $25 or more with the card will earn users extra Farm Cash. Other rewards could be added later on and the program -- and, if successful, could be branched out to other Zynga games like CastleVille and CityVille.
With roughly 91% of Zynga’s $321 million in revenue last quarter coming from digital goods, users would certainly like the opportunity to get some returns on their virtual investments.
Later this year, the Zynga Serve Rewards program will include new kinds of loyalty incentives, tying everyday spend to Zynga's Game Cash in ways that go beyond the initial first five purchases of $25 or more.
This looks to be a positive business partnership that could help Zynga show further expansion past Facebook, especially since the social networking giant has not been fairing too well on the public trading floor.
Facebook hit the public markets at $43, with the share price rising 12.7% in the few minutes of trading.
While this was a modest pop, it has not be trading north of $42 in the following 30 minutes and it seems that the debut, plus the lowered confidence that investors have in the Facebook revenue model is hurting Zynga. Facebook (NASDAQ:FB) opened on Tuesday at $32.61 and instantly started to sink more than 6% in early trading, close to $31.75.
Since some 15% of Facebook’s total revenue was brought in from Zynga this quarter, according to Facebook's S-1 filings, the companies are interconnected fairly deeply. Of that revenue, about 11% comes from the 30% in transaction revenue Facebook takes from Zynga for virtual goods as well as direct advertising bought by Zynga. The other 4% comes from advertising from Zynga games.
The 15% number is down from 19% last quarter, where 12% of Facebook’s revenue came directly from Zynga and 7% came from the revenue generated by ads.
Despite Zynga’s lower percentage, Facebook revenue from payments and other fees was $186 million this quarter, nearly double the $94 million it made in Q1 2011. Total revenue was $1.06 billion, up 45% from the same time last year, but down from the previous quarter.
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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.