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And this is exactly why I'm predicting a crash in the mobile games market. People are going to figure out sooner or later that they're being exploited and not actually having much fun and the whole house of cards is going to come tumbling down. It's actually worse than that because games make up the bulk of the app stores' revenue.

Zynga was just the bellwether here.

> people are going to figure out sooner or later that they're being exploited and not actually having much fun

The same could be said for Casino's, if the visitors looked at it rationally. But humans often don't make decisions rationally. Especially when it comes to entertainment and escape from reality.

I think mobile/social games are going to get much bigger for just this reason. Casino's have been playing the human psychology game of trading ring-ding-ding and related human excitement for centuries with astonishing success. Even though they've been seen as a menace to humanity, they've nonetheless been able to been able to use every trick in the book to expand their physical presence and market impact.

However, there are huge limitations to casinos: they are limited by regulation; they are limited to physical infrastructure; they have limited space that the customer has to come to.

Quite obviously, none of this exists for the online world. This is the incredible success story of Zynga. They've managed to build a giant online casino and call it a game, and get the execs of Google and Facebook licking their heels.

This is a market sector that will not simply expand. It will explode.

Disagree. The addiction and draw of a casino is MONEY. Not "ding ding ding". Pay to play games eventually offer dismissing reward. Every time you step into a casino you could win big. There is no incentive for these types of mobile games. "one more roll" simply doesn't apply long term.

I agree there will be a correction in mobile gaming. At least I hope to see these vapid "games" get kicked in the nuts a little.

I'm not sure that I want to share more complete thoughts on this subject, as it could easily be used to develop the next generation of money-sucking social games, but here's a partial response.

Casinos offer a variety of different games, which have different appeal to different types of their clientele. There are lottery type games, in which there is a faint hope of a extraordinary windfall, which appeal to people who want money without working for it (i.e. people in debt). There are games in which there is a large degree of control and which the winner emerges because of his/her psychological prowess which appeals to the serious gamer (i.e. professional poker players). And then there are the run of the mill ring-ding-ding games, which appeal both to the idea of winning money, the suspense of the spinning wheel, and various other attention keeping mechanisms.

Social games have the ability to emulate virtually all of these. Although ostensibly buy-in is limited to virtual money that can never be removed from the game, there is nothing stopping large markets to grow around virtual items that can be traded (as happened with Ultima, EQ, SL, Eve, etc.).

The clutch here is that the "fun" of the experience in both cases largely revolves around ideas of advancement, social enhancement of the idea of advancement, and (potentially) some real world tie-in.

Actually, in many respects the social game is far more advanced than the casino already, insofar as it offers the idea of advancement which is potentially not tied to money (i.e. leveling up), but which can also be tied to money if people want it to be.

The problem of this right now is the fact that virtual currency cannot be liberated, but as soon as that problem is solved the casino will be an obsolete institution, soon to be extinct.

You've brought pachinko to mind: "Directly gambling on pachinko is illegal in Japan. Balls won cannot be exchanged directly for money in the parlor. The balls are exchanged for tokens or prizes, which are then taken outside and exchanged for cash at a place nominally separate from the parlor." (quote from Wikipedia)

If rewards could then be converted into real world prizes or money, even if the games are based on "skill" (read: poker), wouldn't these new games be subject to the same regulation as on-line casinos?

Ostensibly, but just how well are governments doing at regulating online casinos? Ok, add in easily accessible VPNs and stable currencies not tied to a regulatory body. The question is not can and will governments make these other currencies illegal, but can governments enforce any laws that they make?

Yes! Mobile game companies are essentially casinos (and receive most of their revenue from whales).

Casinos are wildly different in that is usually a 'genuinely' social activity (most people go with friends), there is the potential to win 'real' money (however slight) and even if you don't win (or lose big) you come away from it feeling as though you had fun - Also, there's free booze.

I agree with the sentiment, which is why I only play in the poker rooms, where the odds are effectively neutralized and you just worry about the rake (which goes away in tournaments, minus 'fees'). But even though I don't like the odds of playing the table games, I will occasionally set aside a small amount to play craps with because it's fun.

> most people go with friends > you come away from it feeling as though you had fun

As the other commenter pointed out these games aren't making money from the average person. It's making money from the "whales".

A close friend of mine is a compulsive-gambler, trust me they aren't there for the booze or the social experience.

Slot machines are where the money is, look at the floor area they give them.

Whales are just the bonus on top and the tables give the sense of glamour/sophistication.

I read it as "People are going to figure out sooner or later that strippers exploit them and not actually going all the way with them and the whole strip bar is going to go down. "

I actually think social games are here to stay, just like old card games.

No, I would rather say as app games market evolve, the developers are moving to where the money is being made: on inapp purchases. Now, while most app games users will not like this idea and do not like in app purchases-based games, to the developers the 1 or 10 or whatever % of those who make purchases counts the most, and those are the ones who they will target their products to.

I wouldnt say it will crash the mobile games market; I would rather say the ratio of all the games designed in ".99 cents" a pop scheme will be on rapid decline...

And you don't think game developers targeting the 10% of the players who, frankly, have a problem, while the other 90% are left with nothing at all, describes exactly a collapse of the mobile gaming market? It's not as though games need to stop being made or that everyone has to lose money for that to happen. Look at this article and it's plain: it's nothing but talk about how developers are going to monetize next - nothing, not a single sentence, about how to improve the state of the art.

The biggest challenge for mobile game developers is that the platform just really isn't all the great for making good, fun games that people will want to actually pay for. And all the brainpower is going into monetization strategies rather than innovating on that platform. Like games on Facebook, mobile is good for making games that separate from their money people with addictive or compulsive personalities. Little else.

I fucking love video games. Console and PC. My Steam account is worth many thousands of dollars by now. I haven't paid for a game on mobile in over a year (and I haven't been downloading any of this free garbage to make up for it, either), and I don't miss it. I read on the train instead. I don't think I'm atypical.

F2P is probably a bubble waiting to burst, a short term trend, but I don't think high-quality mobile games have too much to worry about.

There'll always be a market for great games at a fair price.

Has that happened to EQ, WoW, or other MMOs? They have same model of addition / exploitation.

This is the reason some studios are now betting on the Vita has they hope that there they are safe from this trend.

Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most.

A game that markets itself through a social network is not intrinsically social. It's just parasitic. Zynga is Facebook's tapeworm. Games, for over 5000 years, have been a lot more social than Fartville. This Zynga shit is alienating. It's about as "social" as playing the lottery is intellectual because it involves numbers.

I was at Google during the Real Games battle, and inadvertently became somewhat of a lightning rod for it. I'll skip over the whole history but just say this: if decisions had been made on merit rather than rank, Google+ Games could have been something, and if it had, Google+ would have become an actual contender in the social space. I saw first-hand the damage that Zyngaism can do to a potentially major product.

I think all of this Zyngarbage is an attempt to emulate the success of Magic: the Gathering and its iterative pay-to-keep-current mechanism, but without the insight and work that made Magic (in spite of its annoying pricing model) great.

There will be a flight-to-quality in the gaming space (Zyngarbage will always exist, just as third-rate porn always will, but it will become a low-margin commodity) but I have no idea when it will be and what it will do to the current cottage industry.

You have interesting things to say, I'd like to hear more about the Google+ story for example, but your delivery (because you're so angry) makes it nigh unreadable.

"Makes it unreadable, to you"

It seems like a common handicap amongst otherwise smart and capable people, to possess the inability to ignore tone, style grammar etc, and just judge the message on the strength of it's argument alone.

Otherwise smart and capable people are often handicapped by an inability to ignore tone, style, grammar, etc. and judge the argument alone.

You need to accept the fact that people will evaluate posts based not only on what they say, but on how they say it as well.

No one needs to accept anything, I'd much rather listen to a badly worded, foul mouthed tirade that rang true, than eloquent diction, suffering from serious flaws in logic.

And yes you can have both, but that is not relevant to the argument. The interesting part is that x, (being well spoken), is not a necessary and sufficient condition for y(having a solid argument), yet many behave as if that is the case.

> No one needs to accept anything ...

Suit yourself. But time is well-spent learning to craft readable sentences.

> The interesting part is that x, (being well spoken), is not a necessary and sufficient condition for y(having a solid argument)

It's necessary but not sufficient. Having literary skill won't save a bad argument, but lacking literary skill will surely undermine a good one.

Grammatical ability is a sign of respect for the reader/listener. Without that sign of respect, one is placed at a crippling disadvantage in advance of presenting the argument.

It's not necessary nor sufficient. The logic of argument, does not rely on the emotions of a listener.

Eg. Claim1: The motherfucking sun is deff larger than da moonz!

Without getting into petty semantic deconstruction, the essence of the statement is true, regardless of the respect (or lack thereof) for the listener. You seem to be confusing logic, with persuasion and communication.

> The logic of argument, does not rely on the emotions of a listener.

No, only the outcome -- effective communication.

> You seem to be confusing logic, with persuasion and communication.

You seem to be confused about the purpose of writing -- which is effective communication. Without an awareness of the recipient, writing becomes onanism.

BTW apropos the topic, both your sentences above contain an unnecessary comma.

Ok

Wow, can you two get over yourselves please. This is so awkward, pedantic and embarrassing.

"its"

I consider it a strength to notice both and critique each accordingly. Otherwise you guarantee that you will inadvertently irritate either the big-picture people or the detail lovers (as you have just, ironically, seen demonstrated).

Ironic?

Err No, it is in fact rather apt. As of now, there are two replies to my comment, both nitpicking on the grammar, instead of DH6.

http://www.paulgraham.com/disagree.html

A very very interesting point to think about... I don't see this original post as having a difficult tone or serious grammar issues. Would be interested to hear more of your thoughts about this issue...

I tend to feel that when someone gets angry and start calling names, it signals that either the person hasn't really thought things out or the person has difficulty seeing other points of view. There are multiple perspectives on many engineering topics.

That's funny. For me it had the opposite effect. Obviously he has a conscience, for anyone with an intellect who is not the least bit offended by Zynga-ism is, arguably, lacking in that capacity, i.e., in need of a real conscience.

I'm a huge fan of Church's writing in general but I too find the namecalling to be an unfortunate distraction.

Something you and the parent are missing: the Zynga-style "social" games are overwhelmingly (80%+) played by a completely different target group than 99% of all computer games before them: adult women.

They are most definitely not going to disappear unless there is competition that appeals to that target group more, and the (admittedly short) experience says it's not going to be something with a big element of skill.

> Any sensible game developer will go this route. Add to this the "social" layer being foisted on users and it's really looking like dark days ahead for gaming.

Was this not the same with arcade games padding difficulty and length to force players into shelling out quarters? I find the "IAP and F2P will RUIN GAMING!!" arguments to be mostly based in fear and not common sense. It's true the majority of people aren't engrossed in gaming culture, so they are more likely to fall for F2P tactics, but that doesn't mean every single developer is going to leave the "quality" gaming market to wither and die.

But arcade games did dominate game design for about 15 years. It wasnt until the late 90's that console developers realized that they didnt have to design games the way they had been doing since 1980. Just look at Super Mario Brothers, it is designed as an arcade game: lives, timer, padded number of levels.

On a side note: I would take arcade games over social games any day. Arcade games were made to be hard in order to gobble up quarters. Anyone born in the early 80s remembers games as being really, really challenging. Social games are being made to be mindless and addictive.

I hope that Apple will realise that these games are hurting its brand and products and will kick them out of the App Store just like they did with fart apps. I don’t see what kind of business advantage allowing these games gives them.

It’s their “walled garden” and it’s their responsibility to take care of it when it’s overran by weed.

But it's a small minority that don't like them. They successful because they're popular. If Apple removes them, people will freak out! And maybe even buy an Android device.

My theory is that they aren’t successful because they’re popular, they’re successful because the business model is lucrative. If what they say is true and the bulk of their revenue comes from a small portion of their “customers”, they need to be a lot less popular to be successful (both in terms of downloads and revenue) than traditional, payed games.

I think they might segregate the to expose others better but they aren't about to ditch their biggest earners (or piss off their customers who love these so much they keep spending money on them).

Why would they, when these apps make buckets of money and Apple gets a nice chunk of that at no cost to them?

At the end of the day, Apple makes money by selling iPhones and iPads. App Store revenues are rounding error. The App Store has one function for Apple: to help selling more iPhones and iPads. (In Q3 2012, iPhone and iPad sales constituted 72% of Apple’s revenue, while the iTunes Store, which includes the App Store, but also music, movies and TV shows, was only 6%.)

The proportion of net profits would be more interesting to know - I imagine the margin is quite a bit higher on iTunes Store revenues.

Sooner or later, parents are going to start making a lot of noise about the waste of their childrens' lives, and the media are going to start campaigning for the government to Do Something (tm). Legislation is a terribly blunt instrument. Apple might find it very much worth their while to take action before governments take it for them.

The noise that parents make is not going to be the waste of their children's lives. It is going to be over the fact that these companies are preying on children.

There have been a number of cases of kids discovering that they can make in game purchases really easily, doing so a lot, and by the time the parents find out thousands of dollars have been spent.

See http://abcnews.go.com/blogs/technology/2012/04/parents-sue-a... for one lawsuit based on this. Admittedly it was over a bug where kids could spend thousands of dollars on a "free" app without needing the password. But kids learn parents' passwords all of the time. How long until there is a lawsuit over the problem of kids who got the necessary password running up huge bills?

I consider myself sensible, but I would never use IAP, except under one condition: the old "shareware" method. That is, distribute a demo for free, charge for the full game. Even this model has been abused though with certain expansion packs (cough cough Mass Effect).

The second you start treating your customers like cash cows, the faster history will forget your game. Make games that are fun to play, charge enough to support yourself and expand your company. You do not need to rely on parasitic behavior to accomplish this. The possible end benefit is that you build more loyal customers. After having played my first game with IAP, I will never buy another.

I loved shareware games back in the day. Being able to play a substantial portion of the game for the price of a stamp and a floppy disk pretty much guaranteed you would want to get the whole thing if the game didn't suck.

I did pirate a few games back then but the majority of the games I bought at full price were shareware.

I don't understand why this business model doesn't seem to exist any more. Just throw a demo of your game onto a torrent website and make grabbing the full game as easy as possible.

Even on Steam there are hardly any playable demos.

If you're on a torrent site, why would you download the demo instead of the full game? Even if you were planning on paying for the game if it didn't suck, there's no advantage to neither you or the developer in downloading the demo instead.

Some of us still don't enjoy downloading 5 gigabytes just to try a game. Granted, this makes crafting the demo a little harder than putting in an unlock code.

As for torrent sites - demos could easily be distributed separately from full games. Companies could even have private trackers, though they might want a custom installer for that.

You could (and can) get high-quality games for a low price

It seems to me that if people were willing to spend more money on quality titles this trend wouldn't exist.

High quality AND low price? Seems unsustainable to me.

Completely agreed. My hope is that either the whole thing collapses with a "what the heck were we thinking" like the $3 ringtone idiocy from several years ago, or at least that there's enough customers like us so that lack of IAP becomes a viable selling point.

""" Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most. """

I think you can see that some game especially on mobile are starting to be more social and more skill based, even if the gameplay is asynchronous. I'm thinking about games like Words with Friends or SongPop. Draw Something is also really social but it's cooperative, not competitive.

I don't have an issue with in-app put purchases, it's like the old try-before-you-buy model. I have have spent 100s of hours playing "robot wants kitty" (with in-app purchase called kitty connect to get user levels) and "Solomon's keep" with its addons. Both apps are free (and brilliant), with optinal paid add-ons that make the game even better. If it weren't for these two games (with addons), I most probably would have traded my iPhone in.

@cletus - Couldn't agree more with what you said

The in-app purchase is one of the worst elements of mobile gaming of all-time. The social games are complete shit and why Zynga is about to be de-listed from the market.

It's a shame there's so much emphasis on QUANTITY over QUALITY these days with both consumers and developers.

I came to say the exact same thing. I hate almost any form of in-game currency, and the "rise of IAP" coincides with me stopping downloading games at all (I think the last was Death Rally).