Zyngapocalypse Now (And What Comes Next?)

http://techcrunch.com/2012/08/04/zyngapocalypse-now-and-what-comes-next/

by irunbackwards • 14 years ago

91 53 14 years ago

BaseBand• 14 years ago

They just need to bring back all the BBS based games.

Apocryphon2• 14 years ago

If all of the anti-hype (the FUD?) about not just Zynga but companies that pump out AAA games in general, video games in general is heading for a crash not seen since the days of Atari. Fortunately, with the advent of Kickstarter, indie and Eastern European (and other non-American) studios, there will still be plenty of cult classics that will appeal to more hardcore and niche gamers.

jay_kyburz3• 14 years ago

Why is this being down voted? I agree. In fact it's happening right now. Every large AAA studio in Australia has already closed. There are so few big console games in development right now.

robryan3• 14 years ago

As AAA games get more expensive to make there has to be less in order for each to sell enough units to make a return on the massive investment.

This opens up more space for small studios and indie games, which I think is a good thing.

reitzensteinm• 14 years ago

You may be right in general, but Australia is an extremely poor example.

The economy is booming from mining right now and the dollar is very strong, meaning the cost of living in USD dollars has nearly tripled since its low point in the mid '00s.

balloot2• 14 years ago

I still don't see how people can equate Zynga with the game market as a whole.

The "Ville" products are not games. They don't reward skill, you can't win them, and they don't offer any fulfilling multiplayer experience. Most real games fit one or more of these attributes.

Zynga products have more in common with cigarettes than something like Starcraft. Both of the former offer a not-terribly-fun experience that has been thoroughly optimized to provide maximum compulsion and habit. The other is made for entertainment and draws its value from people enjoying this entertainment.

pi18n• 14 years ago

And it is worth noting that, unlike FarmVille, Starcraft has created a pretty involved tournament scene. Many people enjoy being spectators, there are screencasts with commentators, and top players can make a living winning tournaments.

I don't think well-crafted, interesting games will crash.

Apocryphon2• 14 years ago

I'm not saying Zynga is the same as EA, though the impending implosion of mobile/Facebook-based social games seems to match the possible implosion of the console game market as well [1]. It's a separate phenomenon, but they seem to be coincidentally happening at the same time.

[1] http://www.theverge.com/gaming/2012/7/2/3125866/the-state-of...

fscof2• 14 years ago

It's interesting that Blizzard/Activision doesn't ever get labeled as a social gaming company, even though they've created three of the the best social games in the last 10 years with World of Warcraft, the Call of Duty franchise and Starcraft.

trimbo2• 14 years ago

Having spent 7 years in the games industry, I am really interested to see how the kickstarter projects work out. TBH, I don't think some of the more high profile ones raised nearly enough money to make a game to the level of what people are expecting. Also, the timeline. What happens when a year goes by and there's no game. 2 years? 5 years? Some of the people raising money are known for taking a long, long, long time to develop a game. Do you want to pay $100 now to seed a game you won't see until 2018?

jay_kyburz3• 14 years ago

This is super exciting to read.

I've been building small web based "social games" for a few years now, none of which look or play like the games of these big publishers.

I think the core mechanics of social games have to be about bringing players together and encouraging them to interact.

I've been trying to self fund everything so far, but things are moving very slowly. I wonder in the turmoil whether I should seek investment and go big.

saraid2166• 14 years ago

The obvious question is, "Will it scale?" I admittedly don't have the patience to click through to your stuff and evaluate it myself, but if you think you can handle it... I imagine the trick would be to convince an investor that Zynga is creating a vacuum that needs filling.

(Also, grain of salt. I do not actually have any relevant experience. But if your stuff actually makes social games look good, I applaud that all by itself.)

Nate75Sanders• 14 years ago

They're hiring right now in Seattle (Pioneer Square). I work one floor above them and one of their recruiters sent both me and another engineer on my team an email (the same email) just a few days ago mentioning that they were right below us.

Strange timing given their stock falling.

vecter• 14 years ago

In August of 2008, I was a senior in college and went to our school's engineering recruiting barbecue. There were a lot of finance firms, including Lehman Brothers in all their glory. I remember walking to the booth to ask if they were recruiting, and the well-spoken congenial lady gave me a warm genuine smile and said, "yes!".

Two and half weeks later, they declared bankruptcy.

balloot2• 14 years ago

The fundamental problem with Zynga products is that they're not games. The fact that they famously concentrate on "compulsion loops" and forming habits in their users tells you all you need to know. No real game has to focus on the compulsion to play - they just make the core game experience great so you come back. Not to mention that compulsion loops require user gratification, and there's only so much gratification you can squeeze out of harvesting digital goods.

The one notable exception is Poker. Poker is an actual game, and not shockingly it's the Zynga product with the most profitability and longevity.

jay_kyburz3• 14 years ago

I wouldn't go that far. I would say a game like Diablo is basically just the same kind of "compulsion loop". Just done better. :)

robryan3• 14 years ago

One difference with Diablo is that I can stop playing for a month and then come back to the game. Most of the social games are trying to encourage constant interaction, if you don't harvest your crops today they will die etc.

WoW was/ is somewhat like that, if you wanted to get the best gear/ achievements in the game you would have to play many hours daily to keep up with points, clear the top level raids etc.

jquery2• 14 years ago

> I would say a game like Diablo is basically just the same kind of "compulsion loop". Just done better. :)

Look no further than the extraordinary backlash against Diablo 3 to see the problem with that "compulsion loop" applied against modern gamers.

To be honest, I don't think the problem is necessarily with the compulsion loop itself (Diablo 2 had no such backlash). But when combined with a real-money "Paid Advantage" model, it creates a huge populist backlash against the game.

saraid2166• 14 years ago

What, no casino analogy?

Zynga products are games. (Note: I'm 100% anti-Zynga, but I'm also something of an amateur game theorist. Thus, this will be a bit pedantic.) Zynga products are essentially casino games (which are also compulsion loops) but reinvented for social media. Zynga differs from the casino in two essential ways: (1) instead of being driven by thrill and desperate hope, the compulsion loop is built on peer pressure and sunk costs; (2) instead of being a consummate pseudo-elite luxury experience, it's a habit-forming and largely pointless chore.

Poker (Disclaimer: I have not played Zynga Poker; I'm inferring) doesn't succeed because it's somehow more of a "real game"; Poker succeeds because it's better crafted, largely by years of free play testing in the real world. While in other Zynga products, you're made to feel like you're building up to something, you aren't in Poker. This means that the "user gratification [being] squeezed" is effectively infinite: the false hope being offered is far more acceptable. Poker is older than the Internet.

If you plunge deep into the ivory tower of the games business, sure, you'll find that the term "game" is very hard to lock down properly. You'll probably even find a useful definition that manages to exclude Zynga products without excluding sensible games. But you'll also inevitably find it is full of problems anyways. In the larger picture, Zynga products are games. They're well-designed for the short-sightedness that they're meant for: making money for Zynga in the present: but as you say, that short-sightedness is likely to bite them in the end.

pessimizer2• 14 years ago

Casino games aren't really games either. They're all solved, when you play them you've already lost, and the best thing you can do (other than leave) is follow the program to lose the least (barring blackjack, which gives you something like a +0.1% with ideal play IIRC.) The only way to win a casino game is to stop playing. Casino games are "games" like lottery tickets and Candyland are "games," and far less than sports books or parimutuel race betting are.

Any definition of "game" that is inclusive of casino games can pretty much encompass any process that has steps that are done in turn. They are simply spaced doses of reward and punishment doled out by a random number generator.

Poker, like you said, is not a casino game. It can be made into a casino game, as long as you remove all opponents and rearrange the rules to make it a constantly losing proposition.

michaelochurch4• 14 years ago

it's the Zynga product with the most profitability and longevity.

I'd be hesitant to quantify over the entire space of "Zynga product", because the average adult human produces 1 to 1.5 pounds of Zynga product per day.

aymeric• 14 years ago

Well written, great analysis.

richardjordan• 14 years ago

The bogus business model of in-game purchasing needs to be called BS on too. Yes I know it works in other countries, but that's usually in intense games where the engagement is high and long term.

My household probably counts as a high dollar in-game purchasing one. We probably boosted the numbers of some game developer.

Reality: a kids game had a $99 purchase option for hearts on the screen and my then 7-yo daughter not really understanding this was real money, spotted her mom putting in her password for App downloads and copied it to make about $400 of in-game purchases. This is nothing but a scam. There's no legitimate reason a game targeted at that age-group has a $99 purchase option other than to try to trick kids into spending money they don't know is being spent.

As the OP says - the quality of their product is terrible and once novelty wears off, apart from a few people with addiction issues their business model collapses.

Hate Zynga. Hate Groupon. Hate that they made such a big splash as tech IPOs yet will ultimately crash and the harm will spread to tech startups in general as the markets learn to distrust tech IPOs again.

dominostars• 14 years ago

Right now 17 of the top 20 grossing iPhone apps are freemium. Are you suggesting that these apps are only able to succeed because of accidental purchases?

jquery2• 14 years ago

I would argue they are succeeding due to greed and ignorance, the likes of which will necessarily cause a crash and hopefully subsequent rebirth of true gaming.

saraid2166• 14 years ago

> Hate Zynga. Hate Groupon. Hate that they made such a big splash as tech IPOs yet will ultimately crash and the harm will spread to tech startups in general as the markets learn to distrust tech IPOs again.

I agree and would add Facebook to this. None of these companies seem to understand the transactional nature of value: of providing enough that people are willing to give it in return. Even going off of nothing but statements from their leadership, there's so much arrogance and condescension that even if they were providing value, I'd be leery of their products.

Steve Jobs was widely regarded as an asshole, among many other characteristics, but he was also widely regarded as an inspirational figure who gave a shit about quality for quality's sake and valued Good Things like beauty and harmony. These guys? Zuckerberg's great value is the death of privacy. Pincus proudly states that his company is evil. Mason... I don't even want to know.

RoboTeddy• 14 years ago

I'm working on a game that the author of the article would probably put in the "G2" category.

I wouldn't normally post a job ad in an HN thread, but the content of this one is likely interesting to people here: http://graffitilabs.com/jobs

"If Minecraft were a little more friendly, free to play, a little prettier and a little more easily hooked into social networks maybe that would be it."

That quote describes our project pretty well. We're not trying to be Minecraft, but it's definitely influenced us.

Browser-based games are just getting their start-- I think the future holds a lot of awesome stuff.

comex• 14 years ago

> Status is a minority interest in games, and sales of status items tend to be small compared to sale of utility items (in cases where both are available).

Funny you should say that - I was just playing TF2, which Valve has called "America's #1 war-themed hat simulator"... which has apparently been successful enough with its move to free-to-play, apparently relying mainly on sales of status items, that Valve will be using the same model for Dota 2.

Of course, both games have solid foundations as actual games, rather than awkward socializing environments.

gnufied• 14 years ago

I play Dota2 and has never bought or traded any item. Agreed Dota2 will be free to play, but compared to TF2 - it brings another aspect which is professional game play and ability to watch it within Dota client.

I am not sure, how much money valve will be making eventually but they are already selling tickets for watching professional games within Dota client. I think once it comes out of beta, selling tickets of professional games is a element we can't ignore. remember nearly 40-50K people turn up to watch any competitive dota2 game.

xentronium• 14 years ago

> remember nearly 40-50K people turn up to watch any competitive dota2 game.

Only while it's free. I doubt that they will start charging money for professional games, simply because no one does that. The only actual advantage of DotA 2 against other MOBA games (LoL, HoN, DotA1) are tournaments with huge prizes ("the International", $1M for first place lots of lesser ones). It's not like DotA2 is so much more interesting to watch than HoN/LoL.

cageface2• 14 years ago

In fact my theory was that social games could slide into the same death spiral that Ataridid in 1983... It will also probably happen to handheld gaming soon.

I strongly suspect the mobile gaming fad on smart phones is going to burn itself out sooner rather than later. There's just too much gimmicky crap on the market and, just as in previous gaming fads, this kind of ecosystem strip-mining is eventually going to alienate the gamers.

michaelochurch4• 14 years ago

Excellent article. Spot-on.

"Social games" are the least social variety of game that has existed over the past 5,000 years. They're even less social than typical video games. With console games like Final Fantasy 6 there was, at least, the process of going to school and talking about the game with other kids. There was a social "meta" game. Magic had a similar metagame that was deeply social: you had to engage with other people to figure out what strategies people were coming up with and what the new deck types were. Zynga games don't have that because almost no adult would ever admit to wasting 5 hours per day on Farmville, because it's just too damn embarrassing.

These "social games" exist to generate addiction without content. As peoples' immunities build, that's going to become increasingly fruitless from an economic perspective. And the only thing "social" about them is that they market themselves through social networks. Zynga is, in essence, Facebook's tapeworm. It's also, in my opinion, responsible for a large fraction of the "social network" fatigue that's setting in now.

There was a (failed, alas) proposal at Google to focus on high-quality games for Google+. It was called the Real Games (or Excellence in Gaming) initiative. The idea was that we'd support independent designers who'd give us quality games, instead of publishing the dreck thrown at us by mainstream publishers. We'd have the developer code up the game logic and UI, and we'd take care of web-scale, player matching, and analytics. (We'd also be able to provide a platform for playtesting, which is a major limiting factor for amateur game designers.) I wanted to focus on German-style board games, the best social games (e.g. Apples to Apples), 2D "retro" RPGs, and the most innovative casual games... but inevitably we'd cover the whole space.

The business logic was as follows. Every social network needs to start off seeming upscale, but "upscale" on the Internet has more to do with content quality, intelligence, and in games, NFC (need for cognition) than economic status. Facebook had a huge high ground because it started in the Ivy League. Google+ needed something similar. Providing an extremely high-quality platform for excellent games that can't be found anywhere else would give us this.

We could also integrate these games with Hangouts and make the experience genuinely social. I'm obviously biased, but I think this was one of Google+'s biggest missed opportunities of 2011.

Also, in mid-2011, Facebook's brand was damaged (more than it is now) by these games, due to the game spam problem. Facebook had actually fixed that by then, but reputation is always a lagging indicator and we had a great opportunity to use this to brand ourselves in the wake of the first signs of social network fatigue: "We Won't Waste Your Time With Shitty Games".

You've probably never heard of Google+ Games. That's a good thing. The higher-ups ignored Real Games and took a "Me, too" strategy that failed.

Taking a broader perspective, I've thought a lot about the social space and about games, and I think the fundamental way in which these networking products are undeserving people is that there's no focus on improvement. The space seems to be all about documenting what is (and selling the data to advertisers) but very few (Meetup is an admirable exception) are actually trying to improve the social theater and expand the network. The next great social network and the next great game platform will be ones that improves human interaction in creative ways that few people had ever thought of.

nekojima• 14 years ago

There are very successful Japanese and other Asian gaming companies on other networks and for mobile which could have been noted as alternative examples in the article. They seem to provide a better gaming experience for their users, though its not much removed from the Zynga model, there does often seem to be a higher quality to those games.

For myself, I'd much rather play games on Brettspielwelt* than supposedly social games on FB. The level of play is much higher, its MP with chat, and the strategy games are amongst the hardest boardgames available. Many games can be played in 15-60 minutes and there is no sunk cost or dying crops to force you to continue playing or returning every six hours.

* www.brettspielwelt.de (available with English interface)

michaelochurch4• 14 years ago

Brettspielwelt seems cool, but I don't think chat alone quite brings us to being "social". For all the "hardness" of German-style games (and they're actually not that "hard") they're also quite social. That, I think, is the brilliance of the best Eurogames. They're complex enough to deliver interesting play for the high-NFC crowd, but they're simple enough to still be credible social games. They're non-trivial and involve some teaching time, but they're designed to be played by families.

Google+ Hangout integration with the German games, and with the well-designed social games like Apples to Apples and Great Dalmuti, and with typical card games (Hearts, Spades, Ambition) would have been totally badass. Not only would it have made online gaming actually social, but it would have given people a reason to use Hangouts (which are cool, but never caught on because they didn't have a draw, and games could have been the draw).

What I really wanted was to engage and empower the developer community. Right now, developing a new board game is very hard. You have to print a scrappy prototype and find people willing to play it (play testers). It takes several hundred hours of testing to balance a non-trivial game. This is a major barrier to entry for game development, and in the age of cloud computing and analytics and video chat, there's no excuse for it to be that way. No reason to limit this to German-style board games either; we could have also engaged 2D "retro" gamers and eventually supported MMORPGs. We'd probably want to stay away from the forefront of graphics, but no reason we couldn't have delivered excellent game play.

But... upper management wanted to give preferential treatment to mainstream publishers, and the result is that Google+ Games flopped.

vibrunazo2• 14 years ago

There are already games integrated with hangouts as hangout apps. Why exactly do you say that was a missed opportunity? It seems to me it's more like a work in progress. There's nothing stopping a game developer from integrating it's games with hangouts today.

michaelochurch4• 14 years ago

No one associates Google+ Games with excellence. And no one will. Look at this, which is a top hit for "Google Hangout Games":

https://plus.google.com/109773091778987430194/posts

I just got Tubgirl'd by stuff that looks like scratch-off lottery tickets. Seriously, Google?

Google established its fucking brand by being excellent at something important: web search. They used a mathematical and computational approach (advanced linear algebra, distributed computing) to solve a hard problem. Their brand excellence in Search made them able to capitalize (Ads) on the loyalty they earned by solving Search. Google is supposed to have learned the lesson that when you do something excellent in one area, especially when people are underserved by the lamestreamers (sorry for the Palinism, but it works here) as in web search circa 1998 [ETA: or email circa 2004] or social games circa 2011, it pays off in seemingly unrelated places. Excellence In Gaming could have literally made Google+ a niche winner and an eventual contender instead of the non-player it is now.

Google+ needed to do the same damn thing. To say this: we aren't going to pander, we're going to fucking excel. We may not be the biggest and most established social network, but we're going to have the highest average quality. Center of Excellence.

Now, for Google to go into Games at all was a huge risk, because Web Search and Games are very different. In Search, you have to be ideologically non-editorial (give the user what he or she wants to find, not what your editors think is of highest quality) and you want people to get in and out of your service as fast as possible. In Games, you have to be editorial, because if you waste peoples' time with shitty games, they lose faith in you. (Zynga dreck was one of the major reasons social network fatigue started in mid-2011.) Also, in Games, people are spending hours in your service, not getting in and out as fast as you can send them along. So these are almost opposite categories of service.

What's unnerving is that hundreds of engineers signed a petition agreeing with Excellence In Games, but nothing ever happened except for higher-ups getting pissed off. Google showed it had talent "under its roof" in spades but not the leadership to do anything useful with it.

mjn• 14 years ago

> "Social games" are the least social variety of game

There was an interesting paper on that last year, which systematically catalogued the mechanics used by popular Facebook games. It found more or less what you claim: "no mechanics were found to offer very deep or sustained social interactions between players."

The paper is "Using your friends: social mechanics in social games" by Mia Consalvo (Foundations of Digital Games 2011). Unfortunately paywalled (http://dl.acm.org/citation.cfm?id=2159391), but there are some slides here: http://www.slideshare.net/miaconsalvo/using-your-friends-top...

vinayan3• 14 years ago

Great article. Did anyone go to google finance and notice that Zynga took out a 100 million dollar loan? http://www.businessweek.com/news/2012-07-30/zynga-gets-100-m...

Have they blown through a ton of cash and are worried about dipping into their reserves?

trimbo2• 14 years ago

Wow. That's really interesting news. They raised $1bn in the IPO. Their current assets have dropped from $2bn at the time of the IPO to $1.4bn today -- so half a year. Balance sheet: http://www.bloomberg.com/quote/ZNGA:US/balance-sheet

[edit] They did buy their HQ though for $250MM, which explains some of the transfer of short term to long term assets.

mikebabineau• 14 years ago

(disclaimer: I'm ex-BioWare/EA and work for a[n awesome] gaming startup)

Social games provide tremendous value, just not where most people think. It's not the "social" features, it's the ease of access.

"G2" is not about delivering better social games. It's about delivering "real" games in the browser. If instead of downloading and installing an 8GB package, you could play Diablo 3 by simply going to a website, would you ever choose the former?

iTunes revolutionized music delivery, just like Steam did for games. "G2" is about going one step further. Think Spotify. The same [quality] games you'd download and install will instead be instant-on and resumable from anywhere.

Facebook and Google+ get it. That's why Facebook developed App Center (to showcase top-quality games), and why Google+ is putting so much effort into Native Client (Bastion, anyone?) and Play.

Adobe gets it, too. They're doubling down on Flash development. Stage 3D gives you GPU access - this means 3D in games (see trailer: https://www.rumblegames.com/kingsroad -- disclaimer, I work here, and let me know if you want beta access: mike.babineau@rumblegames.com).

Zynga understands delivery. But could they build a quality game? This takes a different approach to game design, and serious investment into a 3D pipeline and rich game tech.

BioWare, Ubisoft, and other big-name studios understand how to build quality games. But their games are delivered through traditional channels. They need to shift from box products (and from current "digital delivery") and figure out how to build and operate what is essentially highly scalable web tech, and how to operate games as services.

I agree with the author: the companies best positioned to deliver "G2" are a new breed. Look for hybrid teams, people who have built traditional games alongside those who have built high-scale web platforms. This is what will turn the entire industry on its head.

chucknelson• 14 years ago

"...will instead be instant-on and resumable from anywhere."

Haven't OnLive and Gaikai already accomplished this? The main criticism of those services is lag, but for future mainstream games, social and otherwise, the player probably wouldn't notice.

Tiktaalik• 14 years ago

A while ago when they were opening up new studios and hiring talented people from the games industry (eg. Brian Reynolds, ex-Civ2, Alpha Centauri) I thought they were going to move to the next level and create games that would be more engaging to a traditional games audience. We haven't seen that at all however.

I wonder if there is frustration from folks they've hired from the traditional AAA console games industry.

KaoruAoiShiho• 14 years ago

IT’S NOT REALLY ABOUT STATUS Much hay was made back in the day of the value of virtual goods and status, leading to large projects like PS3 Home and Second Life, as well as cosmetic items in many virtual worlds. There was a time, indeed, when many developers were thinking that status items were all they would sell. They missed the point on this by a large margin.

Status is a minority interest in games, and sales of status items tend to be small compared to sale of utility items (in cases where both are available). Most players do not spend that much time on their avatar, do not really care that much about how their virtual house is arranged and when they realise that the rest of the world does not give them social proof, stop buying status items altogether.

This can be confusing to understand because in games like pet simulators it seems as though much is spent on cosmetic items. However it’s important to note that a cosmetic item can also be a utility item (for example: to increase my pet’s happiness I must buy flowers etc). A status item is one that has no utility other than allowing the player to be a little creative or show off.

But Hats?

Zyngapocalypse Now (And What Comes Next?)

Related Stories