The other day, my wife installed a charming, free little game called Disco Zoo on her phone. She made the animals dance around for a while, but then she couldn’t do anything else because she had run out of “Disco Bux.” The options: wait hours for her DiscoBux to replenish, or buy them in packages ranging from 99 cents (for 10 Disco Bux) to $29.95 (for 2,000 Disco Bux). She felt suckered. We have banished Disco Zoo from our house and told it never to darken our door again.
The rise of these games, colloquially called “free to play” (F2P) and “pay to win” (P2W) games, traces back to the original titan of casual gaming, Zynga. Yet Zynga has had a difficult couple of years: Its stock dropped 70 percent from its post-IPO peak in 2012, and founder Mark Pincus was dethroned from his CEO role. After a 36 percent drop in revenue this quarter, Pincus has now been tossed out of his remaining role as chief product officer. As the company attempts a comeback, other F2P makers are improving Zynga’s formula—coming closer to the holy grail, which is to create a game that hooks their users as reliably and totally as cigarettes.
Zynga was once considered a bright star in the gaming firmament. Zynga games like FarmVille were ubiquitous on Facebook. It seemed as though half your friends were asking you to click on their links so that they could improve their farms. Zynga specialized in so-called “energy system” games, in which the ability to play is gated by time. A player may only perform certain game-advancing actions (watering crops, feeding animals, etc.) after a certain amount of time has elapsed, though the player may selectively override this timer through in-app purchases of “energy” (in the form of coins, gems, and the like). Spending money allows players to save their farms from withering, a goal that becomes increasingly difficult as time went on.
Better than any of their competitors, though, Zynga aggressively marketed its games’ ability to allow players to earn “energy” by roping in their friends. Zynga’s “casual games” were inspired by multi-level marketing (MLM) schemes, in which a seller gains prestige and influence in a community by recruiting new sellers into the community and selling product to the new sellers at the next “level.” Zynga’s games encouraged people to recruit their friends to spend time and money on the game, with a “commission” coming to the players through the clicks of those they recruited. Facebook benefited both through the advertising they served to Zynga players as well as through the 30 percent commission they collected on Zynga’s in-app purchases.
Reviled by other gaming companies and pundits alike, Zynga nonetheless made a big splash through sheer profit, at one point contributing an astonishing 19 percent of Facebook’s overall revenues. Their eventual crash looks predictable in retrospect, not because they exploited their users but because they were too exploitative. In FarmVille and clones like CityVille, The Ville, and FrontierVille, the pressure on players to recruit and spend was so great that Zynga milked their users dry too quickly, lacking any sustainable plan for gameplay. Much like a pyramid scheme, Zynga reached a point where users were no longer able to recruit friends nor willing to spend money, at which point they simply dropped out and the structure collapsed. Though Zynga had boosted Facebook’s fortunes from 2009 to 2012, Facebook now viewed Zynga as a parasite instead of a symbiote, cutting off Facebook users from recruiting new players and downranking game notifications.
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