Ok, so you're saying I need to measure this stack against another game that I could ship on this stack. So leaving it generating revenue $X is a loss of additional revenue $Y-$X if I deployed a game that had $Y revenue on the same hardware. Does that about cover it?
The assumption in that though is that game $Y cannibalizes $X. Which is to say if you also release a new game $Y your returns on $X go away.
And while I see that as true with similar/derivative games "CashVille 2" is just like "CashVille 1" but with unicorns or something, I am not sure I'm persuaded that we do accrue an opportunity cost against different game. This is the root of the reasoning in my print money comment.
The reasoning is that if this config pays for the development cost and then generates marginal $ over time, you just add another stack to increase the marginal dollars you get. A writer releasing a second book doesn't 'cut into' sales of the first book, if nothing else they can sometimes increase the revenue of the first book by getting wider visibility.
I'm interested though in how we might reason about the opportunity cost here.
One aspect you aren't twigging on is that the monetization strategy is tied to the game design. Even if every game, on average, took in the same amount of money once it hits critical mass, players aren't going to invest in games that their friends aren't playing, so splitting the audience up hurts Zynga. Their growth strategy was one of complete content saturation using fast-follow tactics. "If they aren't playing Zynga game X, then we want to make sure the other game they will be playing will be Zynga game Y instead." This worked during the explosive growth period, but it's very wasteful now growth is slowing or even shrinking (I'd need to look at the numbers more closely).
As was also mentioned elsewhere, players are always hungry for new items, and my guess is that Zynga has plenty of metrics to indicate that new items is where the money goes (a hefty dose of behavioral economics like scarcity is used on those ones). Simply leaving a game open, or closing it to new players, is probably leaving money on the table. That said, I think there's a big risk in teaching players that their virtual items really do just disappear into the ether.
My guess is it's the right move for Zynga to make, but Indiana Jones and Mafia Wars 2 is a huge blow to them. They were flagship products, and both of them are only a year or so old.
Unlike books, I think the market for these games is inelastic. A player is going to devote four hours per day to some game, chosen from the available games. You want that to be your most profitable game. Allowing them to play other less profitable games is not optimal.
If you somehow knew I was going to buy exactly one book, you'd do your best to make it a hardcover and pull the paperback off the shelf.
So far, for me, this is the most compelling reasoning. In theory to incur an opportunity cost you have to be constrained in some way, clearly Zynga isn't constrained in adding hardware or people (they are laying off in this case) but I can see how the customer's attention span is a constraint. If they have a fixed amount of game time then you're competing for your place in that time slot.
The problem with your explanation is that the player is going to devote AT MOST 4 hours to SOME game, yours or otherwise. There's a risk that those who are leaving the existing game may jump to another game from another company. Reevaluation moments are dangerous.
Actually I'm saying that even the most ardent player of these sorts of games only plays a few of them at any one time. If Farmville is capturing $n net per player, but a new game is capturing $n x 1.25 net per player, your better off killing Farmville, if you think enough Farmville players would then switch. I don't know if this is the case, but that is what I meant by "opportunity cost."
Zynga had copied ideas from competitors, wasn't Cityville a Sims rip-off? Not only that but competitors were ripping off Zynga ideas as well.
I understand the need to constantly change the game to attract new customers and sell new items to the existing customers. I had played Playdom's Marvel Avenger's Alliance, but recently quit because the bugs were very serious and each new thing they added created problems in the PvP mode as well as more bugs. In order to be competitive in that game you need to buy gold to buy rare items on sale for a limited time. My problem was that they have a "Maintenance"/Refresh bug and after I bought gold and paid $20 that I was not given the gold by the game. I filed a tech support ticket with Playdom over it and gave them my Facebook account name and Paypal address. They just ignored it for weeks. Eventually I had to file a complaint with Paypal for not receiving goods that I paid for and was awarded $20 in my dispute with Playdom. Then a few weeks later Playdom had my Facebook account banned claiming "unauthorized credit card use" but that was not the case, it was failure to deliver goods paid for. After trying to resolve the issue with Facebook and Playdom, I eventually quit and removed the game from my profile. I refuse to play any more Playdom or any of its competitors because of bugs so serious that you don't get what you paid for, and they refuse to give you what you paid for or refund your money. I heard from other players that Zynga does that as well. Basically it comes down to this, if they ignore the request for a refund for 30 or 60 days, Paypal or the credit card/debit card company cannot issue a refund after a certain amount of time after the transaction.
I have never in my life seen such buggy software as these so called online social network games. I have never seen such sh*tty tech support as these online social networking games. I'll bet that this is what affects their profit margin, once users get burned in buying premium content they will either play the game without buying anything else, or they will like me quit playing from that company or all companies.
Nope I spent hundreds before that, and was a customer for life. Playing for almost a year.
Any company with shtty tech support and pss poor customer service is going to lose customers by making them unhappy and then spiral their stock out of control into a bankruptcy. That includes Facebook themselves, who even after proof that I didn't get gold in the game for my $20, sided with Playdom in banning my account for a day for "unauthorized credit card use" of my own Paypal account.
Here is another thing, Paydom's TOS says I must file a support ticket with them, I did and nothing happened and they ignored the problem, Paypal's TOS says I have to resolve disputes with them which I did by creating a ticket, and then Facebook got upset because their TOS says I have to resolve disputes with them. Which one gets priority? Playdom and Facebook refused to do anything and then banned my account anyway even if I did nothing wrong and I was the one who was punished for a bug in the game that doesn't give me gold I legally paid for with my own account. That is all kind of messed up there and if this is what happens to a typical user who needs a refund due to a bug in the game not giving gold or whatever they paid for, then this whole industry is going bankrupt into another Dotcom bubble burst. You never do this to your customers, never!
I had to buy gold to buy things in the game I needed. Like ISO8 Goo to do special missions to win a special limited edition super hero, buy better weapons, or ISO8 gems to make my super heroes better.
It is hard to explain, but in order to play the game better you need to keep buying stuff. Zynga games are like that as well. If you don't buy stuff then you suffer in the game and other players can beat you up better.
thanks for your reply!
Do you find that you get more enjoyment out of these types of games rather than on or offline games where you pay up front without "pay-2-play"?
It's quite an assumption to think that after playing petville for 2 years and seeing the plug pulled, these people will be flocking to other Zynga games.
