'FarmVille' gamemaker Zynga sees dollar signs
At least one company is making money off of social networking. The game developer behind 'FarmVille' and 'Mafia Wars' has seen its web-based games take off – and deliver profits.
Mark Pincus, founder and CEO of Zynga
On any given day 500,000 tractors are sold on the Internet. But don't start buying stock in John Deere or Caterpillar just yet. These are $20 "virtual" tractors that belong to the 50 million players of FarmVille, the largest and fastest-growing social game on the Internet.
Social games are free online applications accessed through sites such as MySpace and Facebook. If you've spent any time on either site you're probably familiar with titles such as FarmVille, Mafia Wars, and Caf World. All three games, which rank among the top five games played daily on Facebook, were developed by San Francisco-based Zynga, one of the tech sector's most talked-about companies these days.
Behind the buzz: Annual revenue at the two-year-old firm is likely to surpass $100 million this year, prompting speculation that the company — backed by the likes of LinkedIn cofounder Reid Hoffman and PayPal cofounder-turned-investor Peter Thiel — will soon go public. The software company also has managed to do something that other hot online brands such as Twitter and Facebook have not: Zynga has found a way to make social networking profitable.
Zynga was founded in 2007 by Mark Pincus, 43, who also started social-networking site Tribe.net and software company SupportSoft (SPRT), which eventually went public. (The name Zynga is a misspelled tribute to his deceased American bulldog, Zinga.) While many of his Web 3.0 peers rely on advertising and sponsorship for revenue, Pincus makes its money by getting gamers to buy virtual goods, like tractor fuel or land in the case of FarmVille, that enable players to build bigger farms at a faster rate.
By developing games on social networks, Zynga is able to capitalize on the viral nature of the platform. (Zynga estimates it has 70 million monthly unique visitors.) Gamers can invite friends to join them in the game, and they can send updates on their progress to their friends, stoking interest.
Once hooked, Pincus says, players spend real money on virtual goods to help them advance to higher levels — thereby enriching Zynga. And although playing requires only short spurts of time, the game never ends, as Zynga's designers keep adding levels so that players come back for more.
"For me it's just relaxing and fun. I don't have to think hard about it, and I can do it while watching TV," explains Lauren Kohn, 37, a mother of three in San Jose who has spent more than $100 on virtual goods since she started playing FarmVille four months ago.
Pincus won't reveal his margins, but he acknowledges that the company has been profitable every month since September 2007.
By contrast, Twitter doesn't even have meaningful sales, and Facebook only recently claimed to be cash-flow positive. And if online reports are to be believed, Zynga spends millions each year marketing itself on Facebook, thereby providing the social-networking site with a chunk of its revenue. Talk about the tail wagging the dog.
I paid for a manor on farmville, clicked on in error, gave back he house then they kept my fv dollars I just paid $40. for on my credit card give back the fv dollars or I will contest all charges I have made. and will no longer play. funny I would actulaly like to apply for brainstorming art job with you , however don't like the billing pratices I have expienced …fix it.
Zynga has demonstrated a distinct lack of customer support. Not low customer support, a 100% lack of it. Multiple times during January, their flagship game, FarmVille, has locked out their most active players: the ones paying cash to Zynga. Complaints have been filed with Facebook for Zynga violating FB's terms of service for failure to provide support for their app. If FB removes Zynga Games, Zynga as a business entity is history. Unless and until Zynga switches from fly-by-night cash grab company to being a serious Internet gaming company with customer support, stable gaming platforms, and moves to a position where their main customer outlet may ban their games for violations; I would avoid "investing" in Zynga. Lottery tickets would be a safer investment based on their recent performance and declining user loyalty due to lack of service.
There have been major "server out of synch" and other technical problems with Farmville lately and the communication with customers/"farmers" has been dismal and virtually non-existent.
Hundreds of pages of bug reporting notes (adding up to many thousands of complaints that are probably only the tip of the iceberg) get no reply/specific feedback and despite the fact that the notes are getting more and more irate and directly question Zynga's ability and/or preparedness to deal with such glitches, the response has been extremely disappointing. The best they do is general replies that often do not relate at all to the actual problem.
Clearly Zynga likes raking in the real $$$. But they don't take their own user forums and e-mailed complaints to their customer service seriously. Don't they realise that bad customer care/communication in due course could lead to credibility/image problems that will negatively impact their earnings in the long run??
A pity, because generally speaking, their games are fun and worth the occasional investment of real money…
Have tried everything and everywhere else… So hopefully you will take notice here!!
Just thought I would post this too let you guys know what I have just sent to ZYNGA…
I have copied and pasted what I have written on the Forum for you guys to read… I cant understand as a moderator of 3 other boards and a owner of 2 that your moderators cannot see fit to answer anyone. They are not doing their jobs in fact they are alienating quite a few of your players!!! I really do like this game and even went to Mafia Wars and played that stupid game to level 10 to get the tractor but what good did it do me I have no tractor and cannot get on the farm anymore.. I know guys took server space off Farmville because Mafia Wars players were having the same probs that FV is now experiencing but I think that if you want people to spend there hard earned cash and YES I have bought FV dollars at least 4 times and was about to buy more but wont worry unless you fix the glitches.. There is NO CODE GIVEN WITH THE OUT OF SYNC MESS..
this is what I have posted– I am getting really fed up with this game… Its now more a chore than fun
I cant get past the front door of my farm as soon as I try I get " your game is out of sync with the server please refresh the page" wtf thats all I seem to be doing!
I have bought the schoolhouse the library the new tractor coins taken but the only thing that remains is the schoolhouse I even dropped a level from 55 to 54.. Come on devs fix the problems stoptaking server space from Farmville to Mafia Wars some of us actually prefer non violent games you know. I was considering buying some FV dollars last night but thats not even a possibility at the moment..
I am still waiting for my 12 dollars or my doves to be returned from last week.. Had to buy another lot but dont think I have forgotten I want my 12 fv dollars or doves returned I want my level 55 reinstated and I want my library and hotrod tractor also returned..
I would also like to be able to harvest and plant..
Now if I have posted this in the wrong place so be it but I am getting really annoyed with the glitches and wasting my time trying to play a game that I ENJOY only to take 1 step forward and 3 backward…
I will be posting this elsewhere so as I know you guys see it as you seem to have ignored my last post re the doves…
Now I know you Mods have seen this as you took the time to move it here you also took the time to delete the other posts I put out there.. The question remains IS ARE YOU GOING TO REPORT IT TO THE DEVS OR ARE YOU HOPING THAT MY AND THE MANY OTHER COMPLAINTS REGARDING THIS ISSUE WILL JUST GET SWALLOWED UP AND LOST?
It is definitely not my computer as I using a qosmio x500 quad core that is not even a month old. I am on the fastest internet speed available (fibre optics) in Australia in fact it beats the speeds in Europe and the UK, I have no trouble playing Cafe World or Yoville but I wll cease all connections with Zynga if I do not get some answers SOON.. As mods it would be nice if you could at least answer us instead of just moving threads and sitting back saying nothing. You took the time to move them so take the time and courtesy to at least say oh sorry to hear your having problems but we will get to work and notify the DEVS straight away…
PLEASE FIX THIS AS ITS BEEN ON GOING TOO LONG… !
THX in advance
Look how in all the videos and the news press as it shows how "GREAT" Zygna is, how there ppl are just as normal as us, trying to make a living..how well a profit they make.
Awsome glad things are really taking off for Zygna..
I too am very profitable and earn a great living..as Facebook offers me time to relax and catch up with friends..and play these fun Apps..
Only problem is.. I CANT PLAY THE CRAP ANYMORE CAUSE THERES SO MANY BUGS!!!!! THATS RIGHT "BUGS" YOUR GAME APPS ARE NOT RUNING RIGHT >>FORUMS HAVE NO ANSWERS AND WHEN EMAILING ANYONE WE NEVER GET AN ANSWER>>..WYF>> GET TO WORK FIXING THIS STUFF>> OR SOMEONE MAY JUST PUT YOU RIGHT OUT OF BUSINESS REAL FAST>>THERES LOTS OF COMPETITION OUT THIER>>
ZYNGA U SUCK!!!!!!!
Hello everybody "I'm a farmer", the old Max Yazgar line…….I play farmville to relax, not to compete or be better than the next guy, and I definately don't want to spend my hard earned cash to play a game that's for relaxation. I could tell early on there was an enticement to use real money, especially if you want to buy things with FV's, cause they're so hard to come by, without shelling out the real dough. Why do you think they gave away so much fuel at Christmas, well stupid, that's so you'll buy Seeders, harvesters, tractors(Virtual or otherwise) anything that uses fuel. The free fuel will run out eventually and if you have a big enough farm you'll be shelling out the cash cuz you're hooked!! I love the game but refuse to spend real money, than it's not a game anymore, it's a business, it's not relaxing anymore and you get stressed out and feel like "I gotta get to farmville before my crops whilt", you become so obcessed you aren't having fun anymore. Then there's the otherside, most of the time the game drags along, you loose gifts, it takes hours when it only used to take minutes. The game is flawed or you don't have the correct browser or you need a Java fix, it's always something! Every so often the game works just great and I really have a good time. But more often it drags, stops, sticks, and things disappear. I realize there are a lot of people logging on and it takes a lot of comp to run such a big toy, I just wish they would tell you up front that you'll need to use a certain browser or not to allow your animals to walk or any of a number of things that make the game so frustrating at times. Just ask my fellow Facebook friends, as I have on occasion threw a hissy fit and swore to end the whole thing it frustrates me so much. I've had people call me to see if I'm ok, after a ranting session. Please, either fix the game or if it's not broken tell us how to make it work without having to totally revamp my computer, just to play a game…..I feel better now, I just want to play a game and relax, not be pissed off cuz it's not working the way I know it's supposed too!!
Farmville makes my gifts disapper almost all the time. When it does work, it only gives me one gift. Then it takes the 2nd gift and I can't get it. It's gone for good. I have to gamble my gift away to try and get the first one and it does not care which gift out of all of them I choose. Hope it is fixed soon. It's been 3 days already. Also Farmville is fun only when it is working correctly. I hope others do not have the stress of the game messing up a relaxing game play.
I'd never spend money to play, but I'd buy a pc version for my computer if they made it. You keep nothing with online games.
I play Farmville and Mafia Wars, but I would never spend real money on these games. If that $20 bucks is burning a hole in your pocket, put it in the bank and save for something truly useful. I know several people who regularly spend money on Facebook games, even though none of their kids have college funds started. There are so many better ways to spend your money people, especially since the games can be played for free. Sure there are people who have "money to burn", however, there are a lot of people with families who live paycheck-to-paycheck who are wasting their money on games like Farmville and Mafia Wars. After all, these are ONLY games on the comluter! They are not real life! Save you money- Zynga is rich enough!!!
James,
Your math is correct, and Zynga would have north of $3 billion in annual revenue if all the players of Farmville used real money to buy those aforementioned tractors. But many purchase tractors and other fare using in-game currency that they earn through game play or through the offers that were previously available on the site. Right now most virtual farmers opt to earn the tractors by playing the game, but Zynga reports that 1% of its 100 million unique users are spending real money on virtual goods in its games.
Your numbers make no sense. How can they be selling 500,000 tractors per day at $20/each and have annual revenues that are "likely to surpass $100 million this year"? 20×500,000×365= $3.65 billion in revenue per year. Did anyone do the math, or is this just a case of a reporter uncritically trumpeting a company's numbers for the sake of a good lead? Disappointing.
The real money is in the ads that pop up on the right side of the screen. Nobody I know who plays the game spends real money. You don't need to if you get enough neighbors. More neighbors means you can get to the next level faster. It's better than boring TV.
Profiting from an application that you have the license to is good business. My dislike is the information profiteering that one is subjected to when allowing said applications.
Farmville and Cafe World help me to de-stress for the day. Yes it can be addictive but so is chocolate. So while eating the chocolate I harvest or cook. Thanks and keep the new things coming as it adds interest to the game.
It’s fine if you wish to spend your money that way but as far as the difference in the wii's, x-box or playstation 3 you spend 60 dollars for something that’s not going to run out unless you break it. People are free to spend their money on whatever but not comparable to Sony, Microsoft or Nintendo.
I happen to love FarmVille. Although I don't spend actual money to play, why should anyone think it's stupid for others? You spend $60 or more on PS3, WI or XBox for "virtual" fun, don't you? I don't see a difference. It's all about having fun with a game you enjoy. And don't blame Zynga for making money, anymore that you blame Sony or Microsoft! It's all about the same and you don't have to buy a platform before you can play it! Geez…
And they're moving to the best neighborhood in San Francisco, Mission Bay!
http://imgs.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/08/BUDN1A2E7F.DTL&type=realestate
Right across from Radiance and Nektar
http://www.radiancesanfran.com
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/03/BURG1A0GC1.DTL
I have problem understanding even the first paragraph of this article. It says 500,000 virtual tractors are sold any given day, and such tractor is for $20? Does that mean $10 million of virtual tractors are sold everyday and that alone would give Zynga an annual revenue of $3.6 billion? That doesn't make any sense.
I understand why games like these are profitable. when you have litteraly millions of people playing, it only takes a couple thousand paying 20 bucks at a time to make easy cash. I don't understand why this is newsworthy though.
This is a fun and cute game, but I certainly would never spend real money to advance. I was hooked on this game for a while until recently when the game seems to have become over run with error messages. Plus I maxed out the size of my farm a few weeks ago and am growing very bored with it. Unlock 22 x22 and 24 x 24 Zynga before you become another flash in the pan.
Brendan: Farmville is free. Purchases are optional, not required. We're not all "jobless recluses". I am employed full-time, finishing graduate school in December, and recently got engaged. Oh, and yesterday I bought a new house.
I guess you like to clutter CNN with useless posts to relieve stress. Some of us enjoy picking crops. To each their own.
It is beyond me why anyone would actually pay real money for virtual goods when you can earn them without doing so (if you use a little patience). I am an avid FarmVille player, don't get me wrong, but I haven't spent a cent of my hard earned money on it. It's ok though, I'm glad someone is making a lot of money in this economy because it certainly isn't me!
Wait! People pay money to annoy me with useless postings of Stupid Mafia Wars and Farmville junk? I have to believe that idiots out there pay money to essentially ruin our social networking sites with clutter and junk that has no meaning to most of the Social net world? What a shame! I should bring back the pet rock to satisfy my financial needs, because nothing would be better than buying a speedboat off of human idiocy.Seems the only people who really play these games, and they do ad nauseum, are the same jobless recluses who should be investing in Vermont Teddy bears to fill thier empty void's in thier life. Eeeech!
Leslie of Austin, not to kill the high of your playing but Farmville is created by Zynga. Farm Town on the other hand is created by slashkey. And people who spend money good on them. Small web and game developers like myself can't compete on the level that major companies do. We have to make a profit as well. Spend money if you want and if you don't keep working at it the free way. Most of us really don't care as long as you play our game. It gives us another check mark for applications to larger business.
he's good to think of these things. i admit it that i'm hooked on the said games. how i wish to be included in his team that created this nice games…^_^. more power to zynga(zinga)…
LMAO at anyone that would spend real money on either of these games. Suckers! I was addicted to farmville until a night where all I got was errors every minute. At that point it wasn't worth my time anymore. I agree with the post by Anonymous, "A better use of the money would be to help real humans or even animals."
People have the right to spend their money however they see fit. That being said, it's my opinion that spending money on these games is a tremendous waste, not just of the money itself, but of time as well. I, for one, decline any and all invitations to "MafiaWars," "Farmville," or any such games. I've even gone as far as deleting friends from my Facebook who persisted in inviting me to play.
Consumers are a mystery.
Some will spend tens or hundreds of dollars on virtual goods in a single game. Others will complain about the "value" of a 99 cent application in Apple's App store.
Farmtown is not Zynga, it's SlashKey. And as an avid Farmville farmer, if you are stupid enough to buy the cash and/or coins that you can earn for free, that's your fault. I am on level 31 and have not spent any "real" money on the game. Stop crying about your stupid mistakes.
What utter shame for some people to be so brainwashed to the point where they're using real money to purchase imaginary goods. A better use of the money would be to help real humans or even animals.
Lovely to see Zynga's making money.
It would certainly be nice if they put some of this money toward providing support and fixes for their products. As one of thousands of people who have been unable to access their games for days (if not weeks) on Facebook, I'd like to take this opportunity to ask Zynga to take the time to read and respond to the thousands of complaints on their user forums.
Cheers, and thanks.
"the purchasing of imaginary fuel is a new a low and a highly controversial issue"
but when you "buy" those guitar games you actually "get" to "be" a "beatle"?
my "friend's" warthog on halo used "real" fuel
I am a Farmville player who used a $25 gift card to purchase $20 worth of additional "dollars" to buy land, buildings etc. The only problem is that Zynga charged a service fee that turned out to be permanent. So it actually cost $25 for $20 worth of goods. Their customer service department never understood what I was saying, even after 4 email exhanges, so I gave up. It's a pretty good gimmick they have.
For the record, unless this is another version of Farmville, the tractors, harvesters, and seeders do not sell for real money, only for the imaginary money(Farmville Coins) made within the game; unless someone is silly enough to spend real money for the Farmville Coins which, again, they can earn in the game.
However, after the small amount of free fuel, shared be all three 'machines' is used up, then you have to buy imaginary fuel to use the 'machines' or wait for your fuel to recharge. The purchase of this fuel is with Farmville Cash which is can be purchased using real money, earned through leveling up(5 to start plus 1 per level), or by visiting and participating(enrollments, purchases, etc.) with certain sponsors.
In the realm of micro-payments, the purchasing of imaginary fuel is a new a low and a highly controversial issue on the Zynga boards. In some cases, players have quit or moved to competitor products, such as Farm Town or Lil Farm, out of protest or necessity(carpel tunnel).
I think they have, for now, a successful business model, but I also think that a smart competitor could turn that business model against them, while making their own profit.
As disturbing to me as the idea of spending money on virtual goods is, as incredibly frustrating it is to be challenged with glitches and out of synch messages that delay game play and as hard it is for me to believe that it really would be so terrible for me to be able to send a gift to each of my friends rather than the arbitrary numbers that I am limited to, I am even more disturbed by all the scam sites that attach themselves to this game. Whether it's a tutorial on how to exploit a glitch or a promise of "unreleased" animals or buildings, they generally have in common a request for players to send the message to all their Facebook friends in order to get the non-existent benefit. This makes me think that there is a way for these fakes to gain access to either money or email addresses or both, and that makes me extremely uneasy. Of all the Zynga games, and I have played six, though I now only play two, Farmville is the only one where I have experienced this level of intense targeting. Between that and the continued technical difficulties I'm getting close to curtailing my habit! And I have NEVER spent real money on Zynga's games.