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Wednesday, August 1, 2012

Zynga, Casual Games, and the End of the Skinner Box

Zynga had a horrible last quarter. People are leaving their flagship game, FarmVille, in droves and their revenues are plummeting. It seems that the directors of Zynga also dumped their stock right before the earnings report, so there are now some allegations of insider trading levelled against them.

Some are using this as ammunition against the supposed Rise of Casual Gaming. After all, when one of the biggest companies in casual gaming starts falling apart and revenue from Android apps can be nonexistent, something is wrong in Casual Land.

Before we get underway, I want it to be known that I have a shameful, dirty secret.

I was hooked on FarmVille for a while.

I know! It's awful!


I never spent any money on it, but I tended to my little farm, raised strawberries, collected cows, and annoyed my friends to play. I knew what FarmVille was doing, too. I knew it was just a device to keep you coming back and clicking on things, and I knew how badly they wanted you to spend money on their stuff. I saw right through it, and still I couldn't stop playing.

After a few months I slapped myself repeatedly and made the decision to block FarmVille. I returned about a month later just because I was curious, and all desire to play had been sucked out of me, so I thankfully never cared after that. But I know firsthand what a timesink Zynga games can be and how you can fall into them.

With that out in the open, I learned how easy it is for these games to get their hooks into you. You start playing, and then the psychological processes that form the game's backbone start to take over. Since these games demand your attention, you can't ignore them. Since they fill up your news feed with your friends' accomplishments, you can't get away from them. If you try to ignore the game, you're constantly reminded of what you're not doing.

So maybe you spend a little bit of money trying to get ahead of your friends, or maybe you decide that there's a really cute barn that you just have to have. If that happens, then the sunk-cost fallacy kicks in: "I've already spent X amount of dollars on this. I have to get my money's worth."

Next thing you know, you're down a rabbit hole of haybales and horses. You're rearranging your farm, organizing your fruit trees, and buying a new tractor, and for what? You finally step away from the game when a new shiny distracts you or you lose interest, and the cycle begins anew.

The thing with so-called "casual" gamers is that they don't really have brand loyalty. They don't care that Zynga made the game they're playing, just that they're playing a game. If a new game comes along that tickles that part of their brain, they'll play it, and it doesn't matter who made it. Zynga (or any company who courts a "casual" gamer) may try and cultivate brand loyalty, but in the end, it's for naught. "Casual" gamers play what their friends play, and that's that.

So with that in mind, it's not surprising that some of these companies are struggling, especially Zynga. They've gone back to the well for game after game with the same few ideas.

Compare this with Rovio. Rovio has an incredibly infectious idea in Angry Birds. I personally have spent about $12 on Angry Birds games, and most everyone who has a phone has bought one of them or played the free, ad-supported version.

Rovio has made four incredibly popular Angry Birds games, but after the third, they changed up the game considerably by putting it in space. It's not a cosmetic change, because there are new birds and gravity changes that are fairly complex. For Rovio's next game, they went in a different direction. They didn't go back to the Angry Birds well, but rather made Amazing Alex. It's still a physics puzzler, but you're not killing pigs protected by shoddily-built shelters, but accomplishing different tasks. It's proving fairly popular as well.

Rovio is setting themselves up for long-term success because they're diversifying. They recognize that there's no brand loyalty in casual gaming, so you need to keep churning out new ideas and ways of playing to keep eyes on your games.

Zynga did not. They attempted to put the same "Skinner box" techniques in a variety of venues, and it's failing.

See, when people are whining about casual gamers taking over our hobby, Zynga is the type of company that was the most terrifying. After all, if you could pacify people and make insane amounts of money by having people click on things over and over with no end in sight, what hope did gaming really have?

But now we’re seeing that Zynga’s success may have been an aberration, a short-term lark that could end in a complete rejection of their methods, at least for the time being. That should be heartening to most people who are afraid of “casual” gamers.

However, some people are pointing at this and saying that Nintendo had better beware as well. After all, “casual” gamers propped up the Wii, and casual gamers are fickle. They’re running away from Zynga, and they’ll run away from Nintendo long-term, right?

Well, that depends. If you’re talking about gamers running away from crappy sports compilations that weren’t made by Nintendo, that’s correct. Gamers have roundly rejected that. However, Nintendo as a whole hasn’t exclusively made casual games during the Wii years. Here’s a list of Nintendo’s games that have sold over one million copies:
Wii Sports (79.6 million)
Mario Kart Wii (32.44 million)
Wii Sports Resort (30.14 million)
Wii Play (28.02 million)
New Super Mario Bros. Wii (26.26 million)
Wii Fit (22.67 million)
Wii Fit Plus (20.48 million)
Super Smash Bros. Brawl (10.79 million)
Super Mario Galaxy (10.68 million)
Wii Party (7.94 million)
Mario Party 8 (7.6 million)
Super Mario Galaxy 2 (6.36 million)
The Legend of Zelda: Twilight Princess (5.82 million)
Donkey Kong Country Returns (4.98 million)
Link's Crossbow Training (4.80 million)
The Legend of Zelda: Skyward Sword (3.52 million)
Animal Crossing: City Folk (3.38 million)
Wii Music (2.65 million)
Super Paper Mario (2.28 million)
Big Brain Academy: Wii Degree (2.26 million)
Super Mario All-Stars 25th Anniversary Edition (2.24 million)
Punch-Out!! (1.86 million)
WarioWare: Smooth Moves (1.82 million)
Mario Strikers Charged (1.77 million)
Kirby's Epic Yarn (1.59 million)
Mario Sports Mix (1.54 million)
Metroid Prime 3: Corruption (1.31 million)
Mario Super Sluggers (1.26 million)
Wii Play: Motion (1.26 million)
Kirby's Return to Dream Land (1.31 million)
Pokémon Battle Revolution (1.202 million)
In here, you’ll find a pretty good mix between “casual” games (Wii Fit, Wii Play, Wii Party) versus games that provide a really deep and engaging experience (Super Mario Galaxy 1 & 2, Skyward Sword, Metroid Prime 3). Nintendo, like Rovio, is diverse. They’ve done what they can to set themselves up for long-term success.

That’s why a company like Zynga, with their horrible “games,” is struggling now. All they know how to do is copy the same template, buy smarter companies, and defraud investors. That doesn’t sound like a winning strategy to me.