Zynga S-1: Facebook Credits (Platinum Status)

One of the questions that I posed about the Zynga S-1 filing concerned Facebook Credits.  I noted that the Zynga S-1 was likely to open a window into the size of the Credits revenue stream before the Facebook S-1, whenever that is.  Critically, according to the S-1, Zynga is paying the full 30% — i.e, list price and no super shopper discount for the Credits.  I haven’t seen any disclosure yet about whether there is some giveback by Facebook in advertising credits, so I assume there was not, unless there was no duty to disclose it which suggests it was not material (and it appears that Sales and Marketing Costs where advertising is accounted for went up slightly disproportionately last quarter which might suggest that any giveback is not material).
 
So how big is the Credits revenue stream from Zynga?  After the Facebook Credits cut, Zynga had approximately $222.5 million in “Online Game” revenue (i.e., purchase of virtual goods).  Using that figure and accounting for growth, let’s estimate that Zynga has a run rate of $1 billion in “Online Game” revenue this year.  Further assume that 90% or $900 million comes from Facebook.  This means that Facebook Credits will be collecting $386 million from Zynga for 2011.
 
Pretty impressive both in terms of revenue numbers (presumably pure income other than transaction processing fees) and the fact that Facebook didn’t blink and held to its 30% revenue share for the Credits, even for one its most substantial partners.

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