Is EA Going to Buy Zynga or Playfish in Social Gaming Bid? | Hacker News Reader

Is EA Going to Buy Zynga or Playfish in Social Gaming Bid?

insidesocialgames.com

17 pointscwan6 comments

The better question is when will Zynga buy Facebook as Markus Pincus understands how to generate revenue much better than Mark Zuckerberg.

Over/under on the point at which Zynga's revenues surpass Facebook's?

Honestly, Zynga's success reveals a long-term strategic risk for Facebook. Zynga is supposedly spending $50MM/year on Facebook advertising (or maybe just advertising in general, but a large percentage of that is on Facebook).

I see a Zynga ad on every single pageview. Sometimes even all three ad slots are Zynga ads.

These are ads on Facebook to direct people to other places on Facebook. At first blush that seems brilliant, but how dependent is Facebook on these ads? How tightly is their success tied to Zynga's?

That is dangerous for a business. IMO Facebook is still obsessed with advertising (and with Google). This only works because Facebook has such a huge audience in the English-speaking world.

Will they ever make the advertising breakthrough they're clearly looking for? Beacon failed miserably and generated more than a few lawsuits.

Companies like hi5, with large audiences in Asia and South America, can't sustain an ad business and have switched over entirely to virtual currency and goods.

Facebook has showed some signs that they're interested in this, too. They've been "working on" a payments platform for almost two years now, and they just announced their Gift application will feature real-world gifts from third-parties.

But all their "bold moves" have been in advertising, not virtual goods.

It doesn't matter how big a game dev gets: Facebook makes it possible; appdevs are wondering when the "tax" will start. Well, a de facto tax has already has started, and forcing devs to use less viral channels is when it started. The "tax" is for devs to pay in advertising to ensure their apps continue to grow and competitors don't overtake them. Zynga understands this, perhaps better than anyone.

I predict that later, facebook will add more "taxes" by squeezing out the offerpals and superrewards of their world with Credits (and charging more than them for "added value"), and, as the bar for quality gets raised for games (by the big three), they will even become a broker for in-game advertising.

And thats how the platform cookie crumbles. Its just one piece to facebook's overall puzzle though.

I wonder if there will be a tax revolt at some point, and a company like Zynga builds the social network around the games. Getting games right seems a lot harder than adding in some photo sharing and feed features.

I think social networks are a lot like IM clients. I switched from AIM>Skype>Gtalk because at each step someone offered a new tool that integrated chat. Zynga has found the special sauce for addictive games. I'm sure most of their players would create a new Zynga social network profile if it got them $10 in free poker chips.

The hardest thing about creating a new soc net is getting a critical mass of people. Zynga has that all tied up.

The first tax will be striking in the face of virtual goods services like OfferPal. App developers won't feel the tax, but supporting companies would.

I hear that's their big interview question: "Tell us why we're more important than Facebook."

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