Tobold's Blog
Monday, September 17, 2012
Paying with fake currency

Have you ever tried to pay for a game with fake currency? I hope not, because that would not only be illegal, but also rather difficult to pull off for a very minor financial gain. But what if I told you of a game that accepts fake currency as part of their business model? You'd probably conclude that they can't be doing very well. And you'd be right: Zynga shares are down 70% this year, and the analysts are starting to write if off. And I think accepting fake currency is a major part of their problem.

Many veteran gamers have problems understanding the somewhat weird game / business model of Zynga games. For example Pete of Dragonchasers started a nice review of Farmville 2, before he floundered at the business model. He says: "It turns out milk bottles can be obtained in two ways: by spamming your Facebook friends for gifts, or by purchasing them with real money. If you want to play Farmville 2 without bugging friends, you’ll have to pay cash for milk bottles. In other words, pay to win. I learned this only after I’d scraped and saved a few thousand gold to buy a baby goat. Suddenly I had this kid and no way to grow it up without opening my wallet (I have exactly 1 friend playing the game and I’ve already spammed her to the point where I sent her a message apologizing for it). And that’s when I quit playing Farmville 2."

This is pretty much the description of the game / business model at the core of most Zynga games: "spam your Facebook friends for gifts, or purchase the same virtual items with real money". For most gamers that is a game stopper. The virtual items Zynga sells are surprisingly expensive, thus paying for them would not just be "pay to win", but actually cost you more than a full-price game, and certainly not be worth it. Zynga is *counting* on most people rather spamming their Facebook friends. They allow you to pay the game with "social capital" instead of real money. Their business plan behind that is that this way they'll quickly gain millions of players for each of their games, and access to a network of people who trust each other, and are thus a juicy target for advertising.

Only that while real money is hard to fake, social capital is extremely easy to falsify. All you need is a Facebook account you don't actually use for staying in contact with real friends. Then you'll find tons of fake friends on the games' forums. There are even a lot of tools on to hook up with complete strangers to add as "friends" and neighbors for your game. And as you only added those 50 fake friends to play Farmville 2 or whatever, you don't mind spamming them with requests for milk bottles or whatever else you need. Once you solved that problems, the better Zynga games aren't actually that bad, if you are into that style of "5 minutes twice a day" management games. I still play Castleville, for example, although nothing else.

Millions of people use Facebook *only* for playing games. For them paying Zynga with "fake social capital", by spamming not your real friends but only people who were already playing makes perfect sense. You are not just beating the game, you are beating the business model behind the game. And as a reward you can play a game for absolutely free, because once you have enough fake friends there is no incentive whatsoever to pay any real money for playing. That is great for the players, but bad for Zynga. And Facebook, whose business model is also based on people trusting their real friends. To me as a player it is perfectly clear why Zynga is failing to make money. They would need to structure their games very differently, and sell stuff for much cheaper, but without the possibility to get the same items from "friends". Their current business model is just too easy to "game".

Actually, Zynga are not shy about putting their games in simple terms: it's spam, grind, or pay.

The trick is to suspend the realization - for as long as possible - that the player can refuse to play.

You can check out a video by Roger Dickey from Zynga on the subject of spam, grind, or pay.

As to the "fakeness" of social interactions, I'm certain Zynga have done their homework. Your spamming of friends keeps them in the loop and that drives retention and ultimately monetization. Remember that the longer you stay with a Zynga game, the steeper the progression curve and the bigger your investment.

It could also be the case that spamming works for them as a way to boost their stock price (admittedly sinking right now). Can you imagine how investors will react if they report a drop of 100 million players - even if these are players like Tobold who never paid a cent to Zynga?

There was a time in 2000 when eBay paid $5 for each new registration, even if it was done en masse with emails registered with the same domain. You could make thousands in fake registrations but eBay made more by inflating their stock price - reporting record numbers of new users (probably 80% fakes).
My uncle has two hundred facebook friends from all over the world, most of which he never met. And yes, it's just to play Zinga games.

The day that a friend told me how to block facebook game requests was a happy day.
Hey Tobold. It might be against facebook policy, but i created a 2nd fake account just for zynga games, and i have max friends list since i posted the account on a forum to gain friends. As you play, you start to see the people who play, and the ones that don't, and you boot off the people who arn't actually playing and returning things, and keep spam posting on the forums for friend invites to gain more people to share resources with. I just think of the resource gathering using friends as another part of the game.
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