Draw Something Loses 5 Million Users a Month After Zynga Purchase
forbes.com
forbes.com
Might seem like a trivial comment, but this is a classic case reflecting inability to service player wants. If they kept their word list updated and used a better algorithm to filter out repeat-words, they probably could have mitigated their user churn rate.
Yes, perhaps a larger word list was part of their monetization strategy - but Zynga should've realized that was a bad idea when it acquired the company. When users pay for something, there needs to be an instant sense of reward, and a noticeable lasting sense of reward. A larger word list doesn't really fall into either of those categories.
Edit: Looks like they've since removed the permission and text related to it. shrug
To understand if Zynga overpaid, you'd need to know if they bought OMGPOP for a single hit title, or if they see them as a creative group with many hits to come, like Blizzard or Valve.
The console and PC gaming business has largely been a franchise business, largely because of single-title burnout. And, in fact, it makes little economic sense to keep gamers playing your same, single title for years on end (unless they're subscribing to it, a la World of Warcraft). Big studios typically desire burnout, so that they can sell you a new title or sequel for $50, or a piece of DLC for $5-10, or what have you. EA doesn't want to sell you one game that you'll play for 12 months straight; EA wants to sell you 12 games that you'll play for a month apiece.
The iOS/Android app market has been different, though, and I think it's important to dissect why. First, a title like Draw Something will remain on the "shelf" on App Stores indefinitely. Nobody's holding physical inventory on limited shelf space that they've got to clear at the end of the month. Second, console gaming burnout is often the product of fairly direct substitution in the marketplace -- i.e., I'm going to stop playing UberSoldiers 25 because a very similar title, L33tSoldiers 14, just came out and has better graphics and features.
In the iOS app market, we don't see such direct substitution effects[1]. Nobody's burning out on Draw Something because Paint Something just came out with hotter features. In this sense, burnout on Draw Something might actually mean something interesting. It can't be accounted for purely by basis of comparison to the console gaming market and its standard-issue burnout rates. This is where I think the Halo analogy (really, the standard-issue gaming business analogy) doesn't quite hold up.
[1]Unless, of course, we do. A strong argument could be made that any casual iOS app titles are substitutes. So Draw Something competes with Angry Birds, the same way that Modern Warfare competes with Battlefield -- even though Angry Birds and Draw Something have fewer superficial similarities.
I think the majority of us agree the title strongly suggests so.
We aren't asking these questions if Draw Something added 5 million users since the Zynga purchase. In fact, that would be expected.
It would lose our moves (returning to "Your move" when you'd submitted something hours before).
It would give strange errors "You're using this on more than once device"... erm, no I'm not.
And once it forgot who I was and showed no active games once I logged in again... effectively losing the games I was involved in from my account perspective, but my girl could still see the game and when she nudged it re-appeared on my phone.
And then there is just the non-responsiveness of the server. The start-up splash used to show for less than a second, but now it takes 5-10 seconds if it works at all.
For such a simple app and game it went from being a pleasant distraction to a chore very quickly. As such, our use has plummeted in turn.
Needless to say I don't play any more.
It doesn't talk about current problems, but it may be possible to extrapolate. Still, with user counts going down, scaling problems should be a thing of the past.
At this point, the speed of viral distribution represents both the blessing and the curse of social companies. You can take your exponential growth this month and extrapolate it over the next year, but that doesn't take into account the dozen newcomers that will catch the attention of the fickle 15M next month. When Metcalfe's law works on a scale of weeks instead of years, network effects become more transient and less valuable. Hopefully this helps teach the market that eyeballs alone should not justify an enormous purchase price.
+1.
This drop is " active " users. This is not the end of the world but suggests something bad happened.
Am I the only one who thought 'and jolly good luck to them'?
Not everyone wants to draw Doritos, KFC or Coca-Cola.
Social network fatigue started a couple of years ago. That doesn't mean people are ready to ditch social networks outright, but it means that the stupidest abuses are going to leave a sour taste in peoples' mouths, and Zynga is so well associated with these behaviors that, even if people like some of their games, no one likes them.
Zynga's asset is that they understand addictive behavior and are probably the world's leading experts in a specific niche, which is the online delivery of addictive (not always high-quality) games through social media, and the monetization thereof. This knowledge is going to be valuable no matter what happens in social media over the next 5 years. Their brand and reputation are decidedly NOT assets. The opposite, actually.
If Zynga's executive team is smart, they're going to stop being a primary publisher and acquirer and start working behind the scenes, like a consultant, using their knowledge without doing brand-damage to the games they work on, because even though 90% of people don't care about a game company's reputation, the people who set trends do, and by 2014 no one will play Zynga games.