How Much Money Does Zynga, Maker of Farmville Make?
By Anna Johnson on May 10th, 2010Speculation is rife about how much money social games maker, Zynga, is making. Zynga is the company behind such hit social games as Farmville, Mafia Wars, Poker, Cafeworld and Fishville.
At the high end, Business Insider cites “a source close to the company” as saying Zynga will make $600 million in sales in 2010. Meanwhile, “two people who have been briefed on its financials” have indicated to BusinessWeek that the company will make $450 million.
Jeremy Liew, a managing director at Lightspeed Venture Partners, believes Zynga’s sales are closer to $240 million in year-to-date sales. He reckons the company made $290 million in 2009 and after its revenues grew steeply in 2009, they have flattened out since the start of 2010.
What everyone seems to agree on is that Zynga’s games have been wildly successful. Which prompts two questions for us, as Internet marketers and entrepreneurs, to ponder:
1. Why are Zynga’s games so successful?
and
2. How can we learn from Zynga’s success and apply these learnings to our Internet businesses?
Zynga’s business model is based on getting people addicted to its games and then getting them to both enlist others to join and/or buy virtual goods, both of which help players get further along in those games.
Sounds simple, but getting people addicted to a game, to enlist other players, and to buy virtual goods aren’t so easy to implement, based as they are on tapping into people’s psychology.
Business Insider quotes A. J. Patrick Liszkiewicz’s explanation for Zynga’s success (at least in relation to Farmville) as follows:
“The secret to Farmville’s popularity is neither gameplay nor aesthetics. Farmville is popular because in entangles users in a web of social obligations. When users log into Facebook, they are reminded that their neighbors have sent them gifts, posted bonuses on their walls, and helped with each others’ farms. In turn, they are obligated to return the courtesies. As the French sociologist Marcel Mauss tells us, gifts are never free: they bind the giver and receiver in a loop of reciprocity. It is rude to refuse a gift, and ruder still to not return the kindness. We play Farmville, then, because we are trying to be good to one another. We play Farmville because we are polite, cultivated people.”
Again, however, just as it’s relatively easy to look at a successful movie or book and explain why it’s so successful… it’s much harder to duplicate that success. Otherwise, 8 out of 10 movies and books would be blockbusters… instead of 8 out of 10 being losers or mediocre successes at best!
Even so, we can recognize at least one of the main psychological triggers at work in Zynga’s games – i.e. reciprocity – and weave that into the way WE do business. In fact, many Internet marketers already make heavy use of the principle of reciprocity – the human desire to reciprocate a favor – by providing freebies of various kinds. By offering free ebooks, videos, audio interviews and other gifts, we appeal to our prospects’ tendency to want to reciprocate the favor by signing up to our list or buy our products or services.
Bottom line: if we can combine (a) powerful persuasion techniques such as reciprocity with (b) a product or service our prospects desperately want… we have the ingredients for a blockbuster business.
Sources: Jeremy Liew, “We Estimate Zynga Revenues Around $270M In 2009 And $240M In 2010 YTD,” TechCrunch, May 3, 2010, Nicholas Carlson and Kamelia Angelova, “Farmville-Maker Zynga’s Revenues Reach $600 Million, Fueled By Social Obligations,” Business Insider, April 26, 2010, Douglas MacMillan, “Zynga and Facebook. It’s Complicated,” BusinessWeek, April 26, 2010
