Monday, June 14, 2010

"Begging As Gameplay"

This is an incredible post regarding "Begging As Gameplay":

http://onlinealchemy.wordpress.com/2010/06/09/the-new-social-grind-begging-as-gameplay/

Tuesday, June 1, 2010

The Perfect Storm That Created Zynga

In 2009, a Great Window was left open by Facebook, and the Big 4 (Zynga, Playfish, CrowdStar, and Playdom) took incredible advantage. This window included two very important vectors of communication between application developers and Facebook users: notifications and feed posts. The Big 4 built their respective empires to incredible heights while the brass at Facebook sketched a plan to ease back on these viral vectors. And ease back they did. Developers know that when Facebook killed notifications for games, it was a mere minor bump in the road. Most of their viral leads were coming from invites and feed posts anyway. The killer change, however, was when Facebook shrunk the size of feed posts. The overwhelmingly large (and potentially disruptive) feed posts were a key viral vector during the Great Window that Facebook closed shut in November. Since then, major apps have floundered, their MAUs flattening and then declining. What's the big picture in the current Facebook universe?

For companies like Zynga, the launch of a new product doesn't involve an advertising blitz via Facebook ads. It involves an advertising blitz within their own private space on Facebook, their other products. Zynga has many destination sites within the master site of Facebook, and they advertise their other games there. It's called cross-promotion. And it's incredibly effective. The 75M people who played FarmVille last month? They all saw ads for Mafia Wars and FishVille, every time they logged in. To be sure, Zynga still advertises their games. But probably at a loss. Rumor has it that Zynga uses their impressive profits and capitalization to bid up advertising rates to crowd other players out of the market.

And that's the salient fact of the current market: Now that Facebook has squashed the effectiveness of viral vectors, without a huge installed base, it's difficult for minor players to gain traction. The only way to build a game to great heights is with capital for advertising, or with a brand. Let's examine these possibilities.

Say you're a venture capitalist and a young CEO wants to start (or expand) her social games company. She has a couple of great new games in development, and needs a capital infusion to advertise these products and build up an installed user base. Do you, the VC partner, take that bet? Probably not, and your partners probably won't let you anyway. We haven't see mountains of venture money being poured into the Facebook social games in the past two quarters, and we probably never will, for this very reason - it's not a very good bet.

The other possibility is that Lucas Arts goes to Indie Developer and forms a partnership to release a Star Wars game on Facebook. This is somewhat likely. Smaller studios sometimes win the right to develop hot IP like this. But it's rare.

And that's why we will never see another Zynga, or Playfish. The window is closed. The Big 4 have their installed audiences and can launch new products and advertise to them directly. (Of course, it's not out of the realm of possibility that Facebook could outlaw cross-promotion, but that's another story.)