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"That could make San Francisco-based Zynga the third-largest U.S. video-game publisher by market capitalization, bigger than Take-Two Interactive Software Inc.,

by biznerd 17y ago

"That could make San Francisco-based Zynga the third-largest U.S. video-game publisher by market capitalization, bigger than Take-Two Interactive Software Inc., the maker of crime-game franchise Grand Theft Auto." Awful. A company that uses sleazy monetization tactics (until someone called them out on it) and blatantly ripoffs games from competitors will be worth more than one of the most innovative game developers. Mobwars > GTA? I guess the valuation though reflects the business fundamentals of social vs console gaming.

omarchowdhury 17y ago
yes, costs much less to acquire a social gamer than consolers, but revenue per customer is higher on the console side. i wonder how zynga's revenue is going to be hit when they stop running scammy ads... and if this IPO would even occur.
- jfarmer 17y ago
  They have stopped. According to Zynga, offers consist of only 10% of their revenue.
  - bilbo0s 17y ago
    According to Lehman, just before the crash, their CDS exposure was '...limited.' At debut Novembre Zynga's revenue from offers was ~33%. With each interview since Arrington broke news on the scam, that percentage has gone down. All 'according to Zynga.'
decadentcactus 17y ago
"The game, which lets people manage a virtual farm, has more than 65 million users. That compares with more than 52.6 million units sold worldwide for the Wii, the most among consoles." This also struck me. How is 65 million free users even comparable to selling 52.6 million consoles at $xxx a piece. It's obvious free games would attract more users much easier, but which would be more valuable to a purchasing company? (Not saying Nintendo will be bought, but you know).
- cellis 17y ago
  Production costs. Production costs and the type of customer make a big difference. Casual/Social gamers are, by and large, easy to please. You can spend $1 million on development and get $10 back. Not so with console game development.

by biznerd 17y ago

omarchowdhury 17y ago

yes, costs much less to acquire a social gamer than consolers, but revenue per customer is higher on the console side. i wonder how zynga's revenue is going to be hit when they stop running scammy ads... and if this IPO would even occur.

jfarmer 17y ago
They have stopped. According to Zynga, offers consist of only 10% of their revenue.
- bilbo0s 17y ago
  According to Lehman, just before the crash, their CDS exposure was '...limited.' At debut Novembre Zynga's revenue from offers was ~33%. With each interview since Arrington broke news on the scam, that percentage has gone down. All 'according to Zynga.'

decadentcactus 17y ago

"The game, which lets people manage a virtual farm, has more than 65 million users. That compares with more than 52.6 million units sold worldwide for the Wii, the most among consoles." This also struck me. How is 65 million free users even comparable to selling 52.6 million consoles at $xxx a piece. It's obvious free games would attract more users much easier, but which would be more valuable to a purchasing company? (Not saying Nintendo will be bought, but you know).

cellis 17y ago
Production costs. Production costs and the type of customer make a big difference. Casual/Social gamers are, by and large, easy to please. You can spend $1 million on development and get $10 back. Not so with console game development.