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Comment by georgemcfly | Hacker News Reader

How is Zynga supposedly worth over 20 times what PopCap is being bought for? I must be massively underestimating how much people spend on in-game items in * Ville\* Wars. Or really overestimating how many copies of PvZ have been sold (I've bought it twice). And PopCap's revenue model isn't even almost wholly dependent on another companies success.

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Question: How old are you? I'm 23 and after entering the social gaming industry as a developer, the numbers are actually incredibly surprising. I'm talking like... several hundred thousand buckaroos a day from a single game, all from the same market of middle aged stay-at-home/desk-job women.

Yep, most people have no idea how much money is in this space right now. Real money. Coming from users.

It's enormous.

buckaroos? How much does that transfer over to USD?

i believe it is 1 to 1

You are massively underestimating. Zynga did $500M revenue in 2010 and PopCap did $100M.

PopCap's games are extremely well known and particularly suited to mobile platforms like phones and tablets. If anything I'd say EA bought them for a steal, they are likely to earn back their buying price and more in only a few years.

Sounds like it's about a 10x revenue buyout. Seems right on the money.

It's mostly hype surrounding anything social right now, especially with a good revenue model. Zynga is worth 4x what EA is and currently worth more than EA and Activision combined.

There is a lot of money in social games, but without getting a lot more users (hard when CityVille is hitting 100 million+) or getting much better conversion rates, Zynga is unlikely to see revenue from social games that matches their current value.

That's how successful the Freemium/Facebook model has been, and describes perfectly where investors think the market is going.

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