The company behind Farmville is sealing a deal with Google and has been embraced by Apple and Facebook. That such companies would associate themselves with the exploitation of children and financially depleted addicts is alarming, even in hyper-aggressive Silicon Valley.
There's no question Zynga is on a roll. Despite a scandal over the scammy commercial "offers" it once inflicted on users of its online games, the company has been embraced by Apple CEO Steve Jobs, who in June called Zynga's Farmville a "remarkable phenomenon" and unveiled an iPhone version of the virtual agriculture competition. Zynga sealed a five-year deal with Facebook, the social network that generates most of its traffic. And now, according to TechCrunch, Google has put in $100 million for first rights to Zynga's new games, a partnership that it plans to make a big part of a new social network to compete with Facebook.
Clearly, the companies want some of the sweet bank Zynga is making off online gamers; Zynga grosses around $500 million per year and is growing that number quickly with a roster that now includes FishVille, FrontierVille, PetVille and YoVille, whatever that is.
Still, you'd think Zynga's partners would hold it at a greater distance. CEO Mark Pincus admitted to a problem with scam advertisers and disassociated his company from some of them, right before it emerged he had once admitted he "did every horrible thing in the book to, just to get revenues right away" as a startup CEO. The investment banking flame out is also fighting a federal class-action suit over the ads it carried.
But for Google, Apple and Facebook the PR risk of their recent dealmaking goes beyond Pincus and Zynga and to their customers, current and prospective.
In the online gaming industry, the most addicted customers — and the most lucrative — are referred to as "whales." They spend insane amounts of money buying virtual goods to advance in online games, whether it's seeds in FarmVille or fake fish tank "pearls" in Fishies. And in many cases they really shouldn't be spending that money in the first place, because they can't afford to - they're junkies.
J.R. Parker, the Sacramento-based attorney pursuing the class action case against Facebook, told me online gaming addicts include people on disability and fixed income. As with games like video poker or the lottery, the games can become all someone has in life.
People with access to more money and who are better off can still get themselves in deep. Parker:
We've been shocked by the hundreds of people who contacted us and the many, many people out there who spends hundreds and thousands and tens of thousands of dollars on these games.
SChild addicts get roped into spending insane sums, too, which seems very much by design: Zynga offers at least two different ways to buy virtual currency through your cell phone, a perfect payment vehicle for phone-toting kids acting without parents' permission. Kids without mobile phones can charge virtual currency to their home phone. (Click the image above to see the payment options.)
And Zynga is happy to take junkie kids' money. After one British 12-year-old spent $1,300 on Farmville by stealing his mom's credit card, the company refused to reverse the charges. Refused to refund charges for imaginary products that never even existed to begin with.
Apple has already had its first take of the child gaming controversy. Last month, designer Mike Rhode got angry that Apple's iPad payment system allowed his seven year old son to buy $190 in virtual goods for the game Fishes (not associated with Zynga). Rhode had entered his Apple Store password 15 minutes earlier to buy a racing game, and the system cached the password and happily let his son buy whatever he wanted in the "free" Fishies game. When Rhode appealed to Apple for a refund he was told "all sales are final." Again, for a sale of something that doesn't even actually exist.
Apple's CEO has said he's keeping the iPad safe for children. Google's founders have adopted the mantra "don't be evil." Even Facebook's young chieftan claims he cares more about people than money. But give any of those companies the chance to double down on an industry whose profits are fueled by sad addicts and children filching money off their parents — an industry that knows and embraces this fact — and they eagerly take it. All are beside themselves trying to cozy up to Pincus. And there's something sad about their investing time and money helping to spread idiotic games designed via spreadsheet to extract maximum revenue from human zombies. Apple, Google and (maybe even) Facebook are supposed to stand for something a little more enlightened and empowering than that. If you buy into their public statements, at least.