The rise of Facebook and MySpace has brought with it a rise in "Social Gaming" - free to play games, often played by "casual gamers." While these players do not spend money on platforms or subscriptions, they spend small dollars buying virtual goods.When you have a user base of 235 million, the little stuff adds up.
The largest "social games" company is:
- 235,000,000 active users per month
- 65,000,000 users per day
In comparison: Xbox Live (World of WarCraft) 20,000,000 total users.
Zynga owns 6 of the top Facebook games:
- FarmVille - Zynga (83 million users)
- Birthday Cards - RockYo (47 million users)
- Cafe World - Zynga (31 million users)
- Texas HoldEm - Zynga (27 million users)
- Happy Aquarium - CrowdStar (26 million users)
- Mafia Wars - Zynga (25 million users)
- FishVille - Zynga (24 million users)
- Zoo World - RockYou (20 million users)
- PetVille - Zynga (19 million users)
- Pet Society - Playfish (19 million users)
The top 3 social gaming companies in 2009:
- Zynga - $200,000,000 (total revenue)
- Playfish - $75,000,000 (total revenue)
- Playdom - $60,000,000 (total revenue)
Zynga is predicted to earn $450 million in 2010. This year, it's averaging over $1 per day.
However, they spend $60-$96 million a year in Facebook ads to drive users.
The revenue comes through selling virtual goods to game players.
There will be $1.6 billion worth of virtual goods sold in 2010.
90% of zynga's revenue comes from selling virtual goods... and 45% of that revenue comes from FarmVille alone.
FarmVille is so popular that there are more virtual tractors sold in-game every day than real tractors in America every day.
Since most sales are through PayPal, Zynga is the 2nd largest PayPal merchant in the world (eBay is #1).
There were also special offers players could use to earn virtual money to buy more goods:
- The user was often unknowingly subscribed to a paid service and billed
- At the time, these offers represented 1/3 of the company's revenue
- Zynga has made efforts to remove scam offers
Zynga CEO Mark Pincus said that his company "did every horrible thing in the book"... to get revenue.
In over 20 lawsuits, Zynga has accused its competitors of trademark and copyright infringement. They claimed competitors hacked into their computers to steal their "secret Sauce "for creating new games.
Ironically, Zynga's best products are awfully similar to games that appeared before them:
- FarmTown (Slashkey) - FarmVille
- Restaurant City (Playfish) - Cafe World
- Mad Wars (Psychomonkey) - Mafia Wars
Design by Ellie Koning
SOURCES: http:///www.zynga.com; http:///www.independent.co.uk/life-style/gadgets-and-tech/features/welcome-to-farmvilles-population-80-million-1908280.html; http:///www.us.blizzard.com/en-us/company/press/pressreleases.html; http:///www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/04/28/businessinsider-chart-of-the-day-monthly-active-users-of-various-widgets-on-facebook-2010-4.dtl; http:///www.businessinsider.com/googles-china-exposure-600-million-in-sales-this-year-lots-of-future-growth-2010-1; http:///www.scitech.blogs.cnn.com/2010/04/08/british-boy-racks-up-1400-on-farmville/; http:///www.paypal-media.com/documentdisplay.comcfm?DocumentID=2280; http:///www.nes.cnet.com/830-13772_3_20002221-52.html; http:///www.forbes.com/forbes/2009/1116/revolutionaries-technology-social-gaming-farmville-facebook-zynga.html; http:///www.macdailynews.com/index.php/weblog/comments/24944; http:///www.latimesblogs.latimes.com/technology/2010/04/dst-aol-icq.html; http:///www. techcrunch.com/2010/04/06/zynga-mafia-wars-addicts-can-now-whack-thier-rivals-with-an-sms-message; http:///www.insidevirtualgoods.com/future-social-gaming; http://games.venturebeat.com/2009/10/14/virtaul-goods-sales-to-hit-1-billion-in-2009-as-social-gemaes-pay-off-big/