If you're a small independent game development studio Facebook might seem like a good place to develop games for, but this Los Angeles Times article describes some of the financial pitfalls that might await you if you launch a game in that space. Speaking to the Los Angeles Times, venture capitalist Mitch Lasky, who has invested in Riot Games and Thatgamecompany, said that developers are being scared away from Facebook because they were losing up to 50 percent of revenues to put their games on the site. He said that Facebook takes its 30 percent share, and then another 20 percent goes towards paying for high marketing expenses.
"Facebook is still a viable platform for independent developers looking to make money on a game," said Lasky. "However, companies with aspirations to be larger publishers - Kabam, Kixeye, even Zynga - are moving aggressively off the Facebook platform to mobile and the open Web. Publishers aren't convinced that the costs of being on Facebook are worth it.”
Peter Relan, CEO of Facebook developer Crowdstar, concurs. His studio has been forced to shift to mobile because of high costs. The company used to rely heavily on its Facebook games, with 90 percent of its business tied up in the social networking site. Now the company says it has decreased its reliance by 50 percent this year.
"Facebook is no longer the viral platform it used to be for games," said Relan.
He added that many small developers have been discouraged because companies such as Zynga always outspend other studios on marketing and player acquisition.