Saturday, September 10, 2011

Do you play games produced by Zynga? Of course you do. Nice article here on how they use your gaming behavior to, well, game your behavior...

Here is a fascinating look into business side of the "free" online gaming industry. The focus of the article is Zynga, the creator of many popular games that you play or at least tried to play (in my case).  When you play their games you are part of a larger experiment in behavioral analysis and marketing.  They ARE watching every move you make....

 Virtual Products, Real Profits

""To understand why Zynga Inc. is among the tech industry's hottest companies, consider how it gets people to buy a bunch of things that don't exist.

Last year, Zynga product managers for a videogame called "FishVille" discovered something intriguing while sifting data that Zynga collects when people play its online games. Players bought a translucent anglerfish at six times the rate of other sea creatures, using an imaginary currency people get by playing the game.

The "FishVille" managers had artists whip up a set of similar imaginary sea creatures with translucent fins and other distinctive features, says Roger Dickey, a former Zynga general manager who left the San Francisco company recently. This time, they charged real money for the virtual fish, and players snapped them up at $3 to $4 each, says Mr. Dickey.

Just five percent of Zynga's dedicated fans are contributing to nearly $600 million in revenue last year. Nick Wingfield explains the allure of the imaginary economy sustained with real life dollars.

Zynga is transforming the game industry. Traditional videogame companies create games they think players will like, then sell them. Zynga offers free games through Facebook Inc.'s social network, then studies data on how its audience plays them. It uses its findings to fiddle with the games to get people to play longer, tell more Facebook friends about them and buy more "virtual goods." At the heart of the whole process is Zynga's ability to analyze reams of data on how players are reacting to its games.

"We're an analytics company masquerading as a games company," said Ken Rudin, a Zynga vice president in charge of its data-analysis team, in one of a series of interviews with Zynga executives prior to the company's July filing for an initial public offering.

Over 95% of Zynga's players never spend a nickel on its games. But its audience of 150 million unique monthly users is so large that the small percentage that buy $5 imaginary chickens in "FarmVille" and $3 imaginary skyscrapers in "CityVille" generate big bucks for the company. Some players spend hundreds or even thousands of dollars a month—they're called "whales" inside Zynga, the same term casinos use for high rollers...."" Read the Rest HERE

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