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I think it's simpler than that. Fundamentally, Zynga's business model and products did not line up with the interests of either its host platform (Facebook) or

I think it's simpler than that. Fundamentally, Zynga's business model and products did not line up with the interests of either its host platform (Facebook) or its end users. Its revenue model was also, at its core, coercive and failed to provide real value to its customers. All of the points listed in the article, while accurate, are IMO only symptoms/manifestations of this very core failing. This is also the general case that we can learn from - short of having a government-granted monopoly, if you fail to provide real value to your customers, you will fail.

jpdoctor 14y ago
> Fundamentally, Zynga's business model and products did not line up with the interests of either its host platform (Facebook) or its end users. You left out: But it did line up with the interests of the investors, who then poisoned the well by bringing this POS public.
- potatolicious 14y ago
  I don't think the public has anything to do with Zynga's failure. They've been losing mindshare and players since well before the IPO, and Facebook likewise has been closing the door on spammy app behavior since well before the IPO as well. Zynga's failure is entirely its own doing.
Peaker 14y ago
Towing companies provide negative value to their paying customers, but seem to make a killing.
- adgar2 14y ago
  They provide value to the owners of the roads from which customers are towed - roads typically owned by the public. Your analogy is folly.
  - Peaker 14y ago
    They make their money from the car owners, so who are their customers?
Bud 14y ago
I think it's largely even simpler than you say: They copied everything. They stopped even trying to think up a new idea.
- wslh 14y ago
  I don't think copying is the main reason of failure. Probably if they copy WoW they would be more succesful.
  - ido 14y ago
    $100s of millions (or more) were spent trying to copy WoW by many companies and almost everyone but blizzard failed miserably.
    - derefr 14y ago
      With a lot of them, though, the problem was that $100s of millions were being spent. MMO games--even niche ones--have guaranteed revenue; the problem has always been making a profit after incurring such high initial development costs. You fix this by making games for cheap--Korea is pushing cheap MMOs out by the dozens, and they're all turning tidy profits.
- viscanti 14y ago
  It wasn't the copying, it was the culture of AB split testing everything that killed them. AB (or multi-variate) testing can help improve an already successful product, but I'm not convinced it can build a good game from scratch (or from copy). A culture of design by AB split testing killed any chance they had at creating another breakthrough game. Sending out emails to select users about possible future games, and counting click throughs as votes, with the idea of building the game with the most votes is probably doomed to failure. They double-downed on that strategy, brought in a bunch of MBA types (not evil people, but not great game designers either) to statistically manage game development. It can't be too surprising that great games aren't built that way, and a game company without great games can't survive forever.
ljd 14y ago
There is an interesting parallel to the Zynga model and before you think I'm being too extreme, consider my opinion nihilistic in the sense that I don't believe Zynga is or has ever been Evil. Zynga was a casino. The games offered no real value to their consumers but neither do casinos. The only reason why you continue to play and pay for in game purchases is to get back the high of doing something well; you want to feel the rush of winning. Their main fault wasn't that they did this, it was that they couldn't do it well enough. Addiction's downside is that gains are subjected to the law of diminishing returns. Basically, that your happiness is logarithmic. In a casino, they've overcome this logarithmic challenge naturally, by allowing you to put in an infinite amount of money. The gains are still logarithmic, hence why people can go from gambling $20 to losing their house in short order but Zynga could never figure out how to replicate this in their casino. I think this wont be the last time we see this model in gaming, but the next business will first need to solve this problem: if you make money through addiction simulated behavior, how do you overcome the log returns associated with it?
- rz2k 14y ago
  What does provide real value? I am sure it sounds like nitpicking, but arguments that hinge on an idea of real value are inescapably about a moral judgement of some kind. It hardly matters whether you are cursing the rise of manufacturing in contrast to agriculture, or complaining about the growing portion of wealth and prosperity coming from the service sector. Does the distinction draw a line between Zynga and other games, or between games and other entertainment. Where do professional sports fit in the hierarchy of products with virtue? How about art? I think GP is getting somewhere with the idea about innovation and extraction, and maintaining focus on the utility players derive as an imperative before any extraction can be done. However, it is very easy to get off track venturing into vague notions about real or fake value. If users enjoy playing the games then theentertainment is offering value no more imaginary than any other.
  - potatolicious 14y ago
    Real value is whatever your customers are looking for. In this case, presumably, fun entertainment. Zynga was more concerned with setting up an addiction loop and reaching into your wallet than building anything that lived up to its value proposition: creating fun entertainment. It even fails the main value proposition as a casino - the winnings aren't worth anything.
guelo 14y ago
I got semi addicted to Mafia Wars for about a week back in the day when newsfeed spamming was more wide open. I quickly realized that the game had no payoff and the company had no respect for its users. It felt scammy and dirty. When I later learned more about Pincus' loose ethics it started making more sense. Unfortunately Pincus is a very rich man which will encourage future assholes.

jpdoctor 14y ago

> Fundamentally, Zynga's business model and products did not line up with the interests of either its host platform (Facebook) or its end users. You left out: But it did line up with the interests of the investors, who then poisoned the well by bringing this POS public.

potatolicious 14y ago
I don't think the public has anything to do with Zynga's failure. They've been losing mindshare and players since well before the IPO, and Facebook likewise has been closing the door on spammy app behavior since well before the IPO as well. Zynga's failure is entirely its own doing.

Peaker 14y ago

Towing companies provide negative value to their paying customers, but seem to make a killing.

adgar2 14y ago
They provide value to the owners of the roads from which customers are towed - roads typically owned by the public. Your analogy is folly.
- Peaker 14y ago
  They make their money from the car owners, so who are their customers?

Bud 14y ago

I think it's largely even simpler than you say: They copied everything. They stopped even trying to think up a new idea.

wslh 14y ago
I don't think copying is the main reason of failure. Probably if they copy WoW they would be more succesful.
- ido 14y ago
  $100s of millions (or more) were spent trying to copy WoW by many companies and almost everyone but blizzard failed miserably.
  - derefr 14y ago
    With a lot of them, though, the problem was that $100s of millions were being spent. MMO games--even niche ones--have guaranteed revenue; the problem has always been making a profit after incurring such high initial development costs. You fix this by making games for cheap--Korea is pushing cheap MMOs out by the dozens, and they're all turning tidy profits.
viscanti 14y ago
It wasn't the copying, it was the culture of AB split testing everything that killed them. AB (or multi-variate) testing can help improve an already successful product, but I'm not convinced it can build a good game from scratch (or from copy). A culture of design by AB split testing killed any chance they had at creating another breakthrough game. Sending out emails to select users about possible future games, and counting click throughs as votes, with the idea of building the game with the most votes is probably doomed to failure. They double-downed on that strategy, brought in a bunch of MBA types (not evil people, but not great game designers either) to statistically manage game development. It can't be too surprising that great games aren't built that way, and a game company without great games can't survive forever.

ljd 14y ago

There is an interesting parallel to the Zynga model and before you think I'm being too extreme, consider my opinion nihilistic in the sense that I don't believe Zynga is or has ever been Evil. Zynga was a casino. The games offered no real value to their consumers but neither do casinos. The only reason why you continue to play and pay for in game purchases is to get back the high of doing something well; you want to feel the rush of winning. Their main fault wasn't that they did this, it was that they couldn't do it well enough. Addiction's downside is that gains are subjected to the law of diminishing returns. Basically, that your happiness is logarithmic. In a casino, they've overcome this logarithmic challenge naturally, by allowing you to put in an infinite amount of money. The gains are still logarithmic, hence why people can go from gambling $20 to losing their house in short order but Zynga could never figure out how to replicate this in their casino. I think this wont be the last time we see this model in gaming, but the next business will first need to solve this problem: if you make money through addiction simulated behavior, how do you overcome the log returns associated with it?

rz2k 14y ago
What does provide real value? I am sure it sounds like nitpicking, but arguments that hinge on an idea of real value are inescapably about a moral judgement of some kind. It hardly matters whether you are cursing the rise of manufacturing in contrast to agriculture, or complaining about the growing portion of wealth and prosperity coming from the service sector. Does the distinction draw a line between Zynga and other games, or between games and other entertainment. Where do professional sports fit in the hierarchy of products with virtue? How about art? I think GP is getting somewhere with the idea about innovation and extraction, and maintaining focus on the utility players derive as an imperative before any extraction can be done. However, it is very easy to get off track venturing into vague notions about real or fake value. If users enjoy playing the games then theentertainment is offering value no more imaginary than any other.
- potatolicious 14y ago
  Real value is whatever your customers are looking for. In this case, presumably, fun entertainment. Zynga was more concerned with setting up an addiction loop and reaching into your wallet than building anything that lived up to its value proposition: creating fun entertainment. It even fails the main value proposition as a casino - the winnings aren't worth anything.

guelo 14y ago

I got semi addicted to Mafia Wars for about a week back in the day when newsfeed spamming was more wide open. I quickly realized that the game had no payoff and the company had no respect for its users. It felt scammy and dirty. When I later learned more about Pincus' loose ethics it started making more sense. Unfortunately Pincus is a very rich man which will encourage future assholes.