[p2p-research] facebook gaming scams

[Andy Robinson]

Don't know enough to cover it, but I play many of these kinds of games from
a number of different companies, and they tend to have a very similar
funding model.  There's a split between regular in-game currency and a
special type of currency which buys special items and in-game boosts (which
can include being able to take in-game actions more quickly, buying regular
in-game currency with special currency, adding skill points, etc).  The
trick is to establish the relative importance of three kinds of revenue the
game developers are getting: the "scam" revenue, revenue from direct sales
of special currency, and revenue from in-game ads (which in some games are
VERY prominent).  While I can imagine the extra revenue from offers might be
enough to give some companies a slight advantage if effects of advertising
are cumulative (and I can imagine visibility and popularity being very much
cumulative in a very competitive field based partly on social networking),
from having earlier tried out schemes which pay users to complete offers,
view ads and the like, I very much doubt that offers are the main component
(I think the ratio is something like 10 times as much revenue for the
company for redirecting to offers than for viewing ads, and these games
usually have about four ads showing at any given time, whereas only a
minority complete offers).  Of course this depends on whether the gaming
companies or Facebook is getting the ad revenue.

Zynga is the most successful but also most notorious - the company has a bad
reputation for "stealing" game ideas - they've been accused of copying
Farmville from Farm Town and they actually had to pay up over Mafia Wars
(allegedly copied from Mob Wars).  Zynga's success comes from massive
advertising in Facebook, but also I think from being particularly efficient
and diligent in how it organises its games, which have a very professional
look and feel, and more expansive "extras" than most such games.  Though,
there are many, many similar games using exactly the same basic structure.
The games are open to obsessive play because they are based on repeated
actions and accumulated knowledge, and the social aspect is better
integrated than in older types of gaming.

Another difficulty with these games is that most of them require large
numbers of friends also playing (an incentive to recruit into the game), and
while Facebook allow the games, and allow groups where users solicit for
other users to "friend" them for game purposes, they also have a bad habit
of banning users who add too many friends at once (who their algorhythms
confuse with spammers).  Officially users are only supposed to "friend"
people they actually know.  But if users adhered to this, most of these
games would be either a lot less successful or basically unplayable.

My suspicion is that the overwhelming majority of users never buy special
currency - which is not *necessary* for success in most of these games, or
even especially useful, and which in most cases accumulates anyway with
level-ups or other kinds of success in-game - and that the business model is
thus either primarily ad-funded or depends on a tiny proportion of people
who buy or complete offers.

While MMORPGs and the like used to be mainly paid for by subscription,
increasingly the newer games have turned to funding models based on selling
supplementary extras while keeping the game itself free.  Some have a basic
free-to-play version but require payments for expanded content necessary at
higher levels of play (e.g. all the monsters over a certain level might be
in the pay-to-play areas).  A few allow ad-supported alternatives to sign-up
subscriptions.  Quite a few seem to be ad-based only.  What's maybe relevant
to P2P is the extent to which all these models except the subscription model
rely on the possibility of indefinitely large amounts of "free riding" or
users who pay absolutely nothing at any point towards the game.

bw
Andy



On Mon, Nov 2, 2009 at 6:42 PM, Michel Bauwens <michelsub2004 at gmail.com>wrote:

> anyone feel like covering this for our blog as well:
>
>
> http://www.techcrunch.com/2009/10/31/scamville-the-social-gaming-ecosystem-of-hell/
>
> --
> Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Research:
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> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>
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