This story in SF Weekly is a pretty thorough peek behind the scenes at a thoroughly disreputable company: Zynga, creators of Farmville and other tripe. The story pretty much confirmed what I’d long suspected: that it’s a development house deliberately built by ripping off the work other developers.
I can tell you one thing for certain: Zynga is despised by most people in the gaming industry, which is why company representatives never talk to the press.
The following editorial on social gaming in general and Zynga in particular is something I wrote last spring for Games Magazine.
Now you’re not even safe from Farmville when you go to buy a Slurpee. In an absolutely terrifying turn of events, Farmville publisher Zynga is looking to … (and I shudder as I even type these words) … extend the brand. First stop? 7-11, which is getting Farmville-branded ice cream and drink cups at all 7,000 of their stores throughout the busy summer months.
People, this is dire news. This prime branding spot is usually reserved for tent-pole Hollywood product like Spider-Man movies or Avatar. It tells us that Farmville is doing so well that we might just be stuck with the brand and its resulting toys, clothes, Happy Meals, and animated television shows, all of them promising codes for Farm Coins.
And Zynga is not a company you want to see with a lot of money and power. Their habit of plagiarizing games has been well-documented, costing them at least one 7-figure settlement. (Farmville itself is a straight steal from a game called Farm Town.) Their involvement in dodgy credit card and advertising schemes even generated a class-action lawsuit.
Zynga games are not designed with the player in mind, but the advertiser. The goal is to create games that need continual “servicing,” requiring users to check in frequently throughout the day and thus creating more opportunities for advertising and sales of premium content. The result is a kind of digital crack that has people actually planning their days around their beet-rotating and pig-tickling schedule, or whatever it is they do on their creepy little farms.
Some analysts are even pegging Zynga as a major economic player. A group of equity analysts called Second Shares, which estimates the values of private companies, places Zynga’s potential public value at $5 billion. This absurd number should serve as a timely reminder of the dot-com bubble, and the people (eg: equity analysts) who created it.
Granted, Zynga has about 240 million registered users on Facebook (50% of the market), but the second most successful company in the business recently sold for far less. That would be Playfish, which was purchased by Electronic Arts for $400 million. Even that amount was considered far too high by industry analysts, and merely a sign of EA’s willingness to throw a lot of money around in order to buy any kind of toehold in the social gaming market.
Zynga is certainly making money, but they’re also heavily dependent upon Farmville, which accounts for about 1/3rd of their revenues. The problem is that Farmville has almost certainly peaked, and the social gaming format is on shaky foundations. Most are barely even games: they’re graphical interfaces laid on top of rudimentary spreadsheets. In fact, even without Playfish, EA probably has a more lasting grip on social media and mobile gaming than Zynga. Their ace in the hole is the Hasbro/Milton Bradley catalog, which allows them to create social and mobile versions of Scrabble, Life, Monopoly, and other lasting brands.
For good or bad, the future of social media gaming is tied to the fate of Facebook, and even Facebook isn’t a financial rock. After 5 years of explosive growth, 2009 was their first profitable year. That growth has slowed, and will probably peak at 400 million users. Even with its current cultural ubiquity, Facebook hasn’t hit upon a reliable strategy for turning all those eyeballs into money. Games are certainly one potential source of revenue, but Zynga has already signaled their irritation with Facebook and their reluctance to share a piece of the pie. They even threatened to leave Facebook, which is ridiculous. Apart from Facebook, they have no future whatsoever.
Where is social gaming heading? It’s probably here to stay, and will become even more integrated into the Facebook experience. This is not necessarily a good thing, since most of the games are based on abysmal designs. Success will only encourage imitators, spawning even more inferior games. Facebook and other social media has some limited potential as a gaming medium (my wife and I always have a Scrabble game in progress), but no one has yet figured out how best to match that potential with a good design.