Kotaku 
Enter your username and password.
Denver, 5:58 AM
Sun Nov 29
8 posts in the last 24 hours
Tip us:
Editor-In-Chief:
Brian Crecente
| AIM | Twitter
Deputy Editor:
Stephen Totilo
| AIM | Twitter
Senior Editor:
Michael McWhertor
| AIM | Twitter
Senior Contributing Editor, Japan:
Brian Ashcraft
| AIM | Twitter
Contributing Editor, East Coast:
Michael Fahey
| AIM | Twitter
Contributing Editor, Oceania:
Luke Plunkett
| AIM | Twitter
Contributing Editor, Weekends:
Owen Good
| AIM | Twitter
Correspondent, San Francisco:
AJ Glasser
| AIM | Twitter
Columnist:
Leigh Alexander
Columnist:
Tim Rogers
Original material is licensed under a Creative Commons License permitting non-commercial sharing with attribution.
11/09/09
With the new advertising restrictions that the founder just announced (in regards to their new game Fishville but applying to all of their other games as well), they stand to lose over a third of their $250 million revenue per year.
Plus, they haven't been working towards acquisition, the company is clearly positioning itself for an IPO. Playfish, Playdom, and others were great targets for acquisition.
Mark Pincus has a right to be nervous about this. Playfish was Zynga's primary competitor, and by using some of the resources that EA has at its disposal, they can very quickly overtake a lot of the momentum that Zynga has. Now if Zynga suffers due to this deal, THEN they may well find themselves on the buyer's block and not going the IPO route. #playfish
11/12/09
11/09/09
11/09/09
Whatever EA. I'm not resting until you make a Sim City for the network. #playfish
11/09/09
11/09/09
I'm not sure about the amount of money they seem to be spending, but what seems ridiculous at the time has a way of working out in the end. Getting access to these 150 million "installs" is a tad nebulous at the moment, but if they can turn that into 10 million people that form the equation EA = fun Facebook game makers in their minds, then they win. #playfish
11/09/09
Seems like a smart purchase for EA. Sorta makes me wonder why Activision hasn't done anything in this area... #playfish
11/09/09
Just 18 months of ridiculous work in the hopes that somebody like EA (who showed some mild interest but never followed through) would buy the smallish company I was working for.
Working with them, and seeing/meeting their internal teams responsible for this type of entertainment really highlighted how many resources they were putting behind these efforts, though. They committed to this path a few years ago, and they've been plowing ahead since then trying to gobble up as much of the casual and community market as they can. #playfish
11/09/09
Despite what typical gamers may think, casual is something a lot people are looking at now. If you thought the Wii was disruptive to the gaming world, you haven't seen anything yet. #playfish
10/14/09
What's stopping them from doing so besides it being the worst thing that could possibly happen?
10/14/09
10/14/09
I believe EA is owning about 20% of all Ubisoft shares though.
10/14/09
10/14/09
Appreciated.
10/14/09
10/14/09
10/15/09
10/14/09
10/14/09
10/14/09
10/14/09
EA or the company they bought must have data that indicates the gamers on social networking sites actually DO follow ads they viewed while playing a game. :
The sad fact is that the $250 million cost is primarily associated with ads and not the games. I am yet to play a social networking game that I enjoyed.
Just when I thought EA was shaping up they show their true colors. Why make good games when you can sell ad space? They are every bit as hungry and manic as Activision in regards to getting money from consumers. Don't kid youself.
You can't go from "Spouse letter to EA" to GI's "Champions of Indie" in 3 years w/o some major PR. They don't have me fooled at all.
10/14/09
10/15/09
PlayFish's primary revenue stream is via microtransactions, in-game advertising is a pretty small part. There are also many different types of advertising, it doesn't always have to be conversions. And yes, people do click through and complete offers. The current social gaming leader, Zynga, gets a healthy portion of their current estimated $200mm annual revenue from surveys and partner business offers.
@noob_pwner: To answer your question about audience size, Zynga has about 149mm monthly active users on Facebook alone, meaning people who have logged into a game in the past month and done something (not just installs). Playfish has 57mm. Zynga's last round of funding valued them at $1bn. #electronicarts
10/19/09
SN games are designed to be billboards for ads. That is the only real value they have. As to the hordes of ppl buying avatar upgrades all I can say is that I am embarrassed for them. All of them.
As if SN sites were not already a giant heaping waste of time their worthless game counterparts are even more so.
Besides, companies like these pay people large sums of money to skew statistics in their favor. Especially to gain new investors. 149mm logging in and "doing something"? Htf does that statistic quantify the value of Playfish? Seems completely arbitrary and in truth is extremely general. Sounds good but talk is cheap.
Casual games, not indie, are really sad to me. Their MO seems to be to both waste peoples time and money. To add insult to injury while you play you have a nonstop assortment of useless ads shoved down your throat. Sweet.
Great purchase EA. #electronicarts
10/20/09
"Doing something" was my admittedly dumbed-down parlance for certain API calls that indicate a user is indeed "active" on the application. I should have been clearer to avoid your subsequent misunderstanding and derision. I apologize. In that "value" is inherently subjective with burgeoning fields in the technology sector, there typically arises some generally accepted methodologies for valuation. Social gaming has been around for only a couple years, MAU is just the most visible measurement (and the only one so readily publicly available) for relativistically ranking performance.
"Besides, companies like these pay people large sums of money to skew statistics in their favor."
While a certain amount of juicing goes into the stats and user acquisition costs at most companies are outrageous, the implication that these developers are paying to gain 150mm+ users is ludicrous. Since my last comment, Zynga's MAU total has jumped from 149mm to 169mm. While there is no doubt a certain degree of user overlap, consider this: how much would you accept to install an application and log in once a month? Fifty cents? A dollar? These companies are separated by tens of millions of monthly users, even a dollar per fraudulently-acquired user is tens of millions of unnecessary and legally complicated under-the-table payments (the logistical acquisition, tracking, and payment of which is equally complicated) given that there are literally millions of users willing to play for free, and millions of others who eagerly open their wallets.
I am by no means defending the gameplay aspect of most social games. The vast majority of them are mindless at best and, frankly, embarrassing at worst. However, there are some that do well in effectively leveraging the unique aspects that social networks afford. In infancy, most of the focus is on growth before innovation. From a business standpoint many of these games generate relatively significant revenue with lower investment, faster deployment, more agility, and a much wider reach than traditional console games. Many of these companies are extremely responsive to user feedback and metrics, constantly tweaking their games in a manner and with a frequency that is completely unprecedented in the industry. Like casual games, the broad appeal and relatively lower user demands (given that most users gravitate towards gameplay "sprints" of 15 minutes per session, but multiple sessions per day) permits much more leeway in game design and correspondingly decreased risk. That's why you see all the big publishers moving into the space. There's a lot to be learned there. Already you see lots of F2P principles applied to some traditional console/PC games in a (mostly positive) manner: DLC, constant stream of new and free content, functionality updates based off user feedback, increased focus on interpersonal and player interaction, continued community development and engagement, etc.
Only time will tell whether the space is profitable or companies are able to scale effectively. $250mm is a relative drop in the bucket for EA (they spent $680mm on JAMDAT in 2005.) Playfish is actually one of the better developers out there and, considering analysts peg 2009 revenues around $75mm with only 58mm Facebook MAU vs Zynga's $200mm with 169mm MAU, they still have room to grow and optimize. I should stress that I'm not taking umbrage with an assertion that this venture will be unprofitable, so long that it is made from a position of understanding the space. But simply saying it's a dumb purchase because you don't happen to know anything about it beyond the very cursory, and clearly are unwilling to learn, is something that should be greatly discouraged. #electronicarts
10/21/09
[www.gamasutra.com]
I still hold that the true value these games have is simply as an aggregate for product sales through advertisements. I'm sure that is worth more than you think/give credit for.
"Since my last comment, Zynga's MAU total has jumped from 149mm to 169mm. While there is no doubt a certain degree of user overlap."
No doubt. #electronicarts
10/21/09
User overlap doesn't matter as much as you're attempting to make it seem by truncating my words. Actually, it's a desired positive effect, as the cost of directing a user to another game by the same company is almost zero whereas initial acquisition cost is one of the largest operating expenditures of social gaming. You can plainly see this in the cross-promotional swatch of other game offerings by the same company that adorns most game sites. The theory is that a single paying user is likely to monetize across multiple games.
"First listed" is meaningless in an unordered list, and they preface the list of bulletpoints by saying developers are monetizing with a "mixture of the following business models," which includes advertising, microtransactions, and premium models. Personal opinions about quality or depth aside, Playfish's offerings are games as defined in the scope of this article and the article clearly states that "80% of revenue for games comes from virtual currency."
"I still hold that the true value these games have is simply as an aggregate for product sales through advertisements. I'm sure that is worth more than you think/give credit for."
I disagree. The top application on Facebook, Zynga's Farmville with over 60mm MAU, has no traditional advertising and primarily monetizes through virtual currency. #electronicarts