DISQUS

Gadget Sleuth · 11 months ago

$50 million? Let me see the books. I'd be willing to bet, in this economy, there's some "creative accounting" going on.

Joe Lectual · 11 months ago

not only that... guess what discretionary consumer spending by which socioeconomic class will be the first to go, or has already gone, but Zynga convinced dumbass investors otherwise.... yes, you guessed it, virtual good expenditures for games... what Zynga probably worries about, but investors don't yet have the smarts for, is that Zynga's revenues were based on peoples behaviours and outlooks of the past... where they had jobs and credit was easy. That has turned 180 degrees now and people will simply shut off the spigot....

the investment commty needs to get back to basics, with companies doing basic innovations for new industries... Zynga, Dogster... good god... we still have not hit capitulation yet.... limited partners... call your GPs and tell them to stop this madness.

verozon · 11 months ago

Mark Pincus for Secretary of Commerce!

Joe Lectual · 11 months ago

indeed... if what you want is another Ponzi schemer in charge of Commerce...

plin · 11 months ago

$50 million sounds like a lot. If Facebook was projected to make $300+ million in revenue last year Zynga will be making 1/6th of Facebook. If that is true Facebook should really pay attention and create a specific gaming division.

GeekdomRulez · 11 months ago

I'd definitely bet there is some creative accounting going on there as well. Also, most of that money is made from poker, which is vulnerable to gambling laws. It's a castle built of sand.

Grant · 11 months ago

Not sure about the numbers, but the Zynga games I've played on FB are really buggy.. a lot of "launch and hope it works" situations where something crashes and is down for days. User feedback on their customer service is pretty bad. Maybe it is growing pains, hopefully, as some of the games are nice pasttimes.. but I never trust e-commerce systems that involve my credit card if the site seems buggy.

Tim Chang · 11 months ago

Some clarification regarding Zynga's potential revenues:

The $30-40M annualized revenue runrate is a hypothetical response to the question "how big can social gaming really get -- isn't it just widget hype all over again?" A leader in the space like Zynga could reach a $30-40m annualized runrate quite feasibly in 2009, based on a very simple back of the envelope calculation: a hit social game can generate $1M+/month, and thus three concurrent hit social games including an early breakout title like Texas Hold Em could easily add up to a $30-40m annualized gross revenue runrate (this extremely oversimplified figure obviously ignores game lifespan, churn rates, rev splits, etc. of course).

NVP is not an investor in Zynga nor have we seen any of the company's actual data -- the key takeaway is that social gaming (and it's eventual extension to mobile) as a sector is a bright spot of hope and growth in what looks to be a gloomy 2009. I remain a fan of the company and the overall space as an investment category.

Tim Chang
Norwest Venture Partners

Azam Khan · 11 months ago

LOL@ the cynnicism.

wake up and smell the world of virtual goods. Apps could easily make over 10,000 a day and some can go way higher. Bring traffic in and with a good game concept you could engage users succesfully. Offerpal's network-wide average rate is $75 per day per 1,000 active users with eCPMs often above $150. 80% of top 25 companies use Offerpal to monetize their apps using CPA offers and direct buy.

As virtual goods and currency proliferate, especially on iphone, expect these companies to be raking in large profits. Traffic is key. TRAFFIC AND HOOKS.

Mike Gomez · 10 months ago

Wow $50 big ones. I never imagined people would spend this much on virtual goods, and they say we are in a recession.