Zynga Files IPO, Also Known as the Path to Billions

The new type of games and businesses are carving out new market segments. The people that play Angry Birds or Facebook games are not the same people that are playing Batman: Arkham City and Skyrim. No market is getting hurt. It's not the same developers (in most cases) that make Facebook games and mobile games that make the AAA titlens on shelves. So just because Farmville exists Epic wont stop making Gears of War or some other masculine hardcore title.

The only real place I honestly been irritated in is how Nintendo handled the Wii games. The lured fans in with cool games and then it was mainly the evergreens and casual titles that got released and we saw 2, max 3 core titles during a year, insane. That was because a huge plattform holder suddenly couldn't cater to both sides.

What makes this all so awesome, is the fact that video game makers  
 
CANNOT CHASE EVERY MARKET 
 
which means that we will ultimately win via attrition. It's wonderful.

There are few people in the world less deserving of riches than Mark Pincus. But ethics don't tend to matter much in business anymore.
 
Disregarding the total lack of quality of Zynga's "games" or that they're arguably games at all, I am really sick of seeing the iPhone and Facebook market brought up as where gaming is going. There's no doubt some iPhone games do well but using it as an argument of how iPhone games are guaranteed money is ridiculous. 95% of what's on the iTunes app store/Facebook is garbage and only a small percentage of the stuff that isn't makes any real money. It's as hit driven as any other industry and has the same problem the traditional hardcore gaming industry does. That being that with some exceptions, only the stuff with big marketing budgets gets noticed.  When was the last time you saw any kind of gaming news story about a title on Facebook that wasn't produced by Zynga? There have been many discussions lately about how Facebook may have plateaued (probably one of the big reasons they won't commit to an IPO of their own).
 
The traditional game industry is having a lot of challenges but it's not going anywhere and the iPhone and Facebook haven't been around long enough to prove that they're more than a flash in the pan. I hope not to be honest as more platforms are good but if the games industry becomes *Ville, Infinity Blade and Angry Birds, it will be a sad time indeed.

I heard plans for this some time ago and I could only shake my head. We are on the verge of another tech bubble bursting. This is ridiculous. I'm in finance and this is absolute insanity. Hold onto your money because the number of single-purpose, flavor of the week, flimsy-business-model IPOs have increased dramatically in the last couple of months. Things are going to get rough. If you can afford the assets to short; short.

Peoples financial security is being tied to the company that makes Farmville? 
Why do I even bother defending capitalism?

If you need a reason to hate on Zynga, read this:

http://www.sfweekly.com/2010-09-08/news/farmvillains/

Basically their entire business strategy is "I don't f***ing want innovation.You're not smarter than your competitor. Just copy what they do and do it until you get their numbers." That's from the CEO. They have been sued multiple times by small independent developers (Mafia Wars comes to mind) for wholesale ripping off of game concepts, mechanics, and even art assets

They are basically an ethically bankrupt copying machine, and their financial success is built on providing near zero value through in-game purchases. None of their "innovations" in the casual game space are anything we want to see emulated by other devs. Unfortunately, this IPO will probably go sky high...

@PXAbstraction said:

But ethics don't tend to matter much in business anymore.

When the fuck has it ever? Grow up.

I don't care for social games but they sure do make a lot of money.

Fuuuuuuuuuck I wish I had that kind of money...

@TheDudeOfGaming said:

 I hope Zynga and all the stockholders and all those who play Zynga games burn, slowly, in hell...for all eternity... Edit:Too much?

Umm, why? I don't like their games, but I haven't heard anything about them murdering children...

Grats on the dough

@crusader8463 said:

I hope this fad ends sooner rather then later. Really hate how long it;s going to take for video games to get back to us after all the casuals get tired and move on.

Casual games have proven, even to the companies producing legitimate games, that superficial add-ons/virtual goods can be sold as content, expanding the industry's money bucket surface area. Said products are just boring as shit and I have beef with the over-used terms "Casual & Social" to describe those products. First of all, Zynga's products are not games, there are no achievements to be earned in their games (no I don't mean 360 achievements/ps3 trophies etc) or truly interactive moments (Canabalt is more interactive than any of Zynga's games and you play it with a single button). Zynga products are intelligently crafted money machines. To get what is perceived as progress you must spend real money, therefore the progress is not achieved by in-game actions. The other way these products make money is for convincing the player to achieve this artificial sense of progress in these imaginary worlds is by spamming your friends with advertisements in hope of them joining in, which makes creates another revenue stream. It's like a contagious virus, many people will be immune to it, but it will spread and multiply at a rate quicker than the people being cured, meaning it will never die until an immunisation arrives (a more personal online social network).

Games do not need an end or even a goal as I have conveyed in the prior text. To be a game, there has to be substantial content. No sane person would pay to watch a film without a story or something of artistic merit, personal interest, or intellectual benefit.

So-called social games are not social either, they are inherently anti-social. I would call online FPS's with their juvenile trash-talking target audience a legitimate social games in contrast. There is this illusion that just because "games" like FarmVille have such a large audience, most of which don't even play games, that they are therefore social. There is very little to discuss for said consumers, they do not have any strategy to discuss, things to laugh at, or have this as an enjoyable activity for which they can discuss their real life stories. Having said all that I do predict for these products to one-day become legitimate games or interactive experiences, and animal crossing to be the first game they will emulate as they already are to an extent.

Despite the fact that it is bullshit, the fad hasn't had too much of a negative effect on the stream of games coming in, we don't have to worry about it, just all the people that play those so-called games. They need their immunisation, hopefully some people find the cure.

Whats with all the racism.

Well, good for them I guess.

I heard plans for this some time ago and I could only shake my head. We are on the verge of another tech bubble bursting. This is ridiculous. I'm in finance and this is absolute insanity. Hold onto your money because the number of single-purpose, flavor of the week, flimsy-business-model IPOs have increased dramatically in the last couple of months. Things are going to get rough. If you can afford the assets to short; short.

I am counting on this going the way of LinkedIn and Pandora. Time to short.

@Blair said:

I heard plans for this some time ago and I could only shake my head. We are on the verge of another tech bubble bursting. This is ridiculous. I'm in finance and this is absolute insanity. Hold onto your money because the number of single-purpose, flavor of the week, flimsy-business-model IPOs have increased dramatically in the last couple of months. Things are going to get rough. If you can afford the assets to short; short.

Yep. Best to avoid.  Look at LinkedIn & Pandora on opening trading day.  Lot of people got burned when those investment bankers, family, & cronies dumped their pre-IPO shares.

@KingWilly: Shorting, or going-short is a common method of asset trading in which the seller loans the buyer a specific quantity of an asset (with the assurance that the buyer will return the asset/cost of the asset to the seller at some time in the future). The buyer secures the asset and (typically) liquidates it immediately. At some future date, the buyer is obligated to return the asset back the seller. The buyer yields the difference between the price at the time of purchase and the price of replacement (the current price). The buyer enters the contract assuming the specified asset will decrease in value, whereas the seller yields the asset plus interest paid on the loan.

To explain that differently; a seller loans 10 stocks of Company X (worth $10 each) to the buyer. The buyer converts $100 worth of stock into $100 cash. Two hours later the price of X decreases to $9, at which time the buyer elects to return the asset back to the buyer. Because the price of 10 stocks of Company X has decreased to $9/each; the buyer only has to pay back the equivalent of $90, which makes him a net profit of $10. Conversely, if the price increases to $12/per share then the buyer would pay 10x$12 or $120 in order to return the original 10 shares of Company X (making a net loss of $20).

EDIT: Shorting is typically done through a third-party (or a broker) but, in my example the broker was the seller.

Re: Linkedin and Pandora.

Their value was inflated and buyers paid more than they should've. Result: demand was over-hyped and therefore an inevitable decline in share value occurred. You can extrapolate that basic explanation much further but it is a complex system of buying and selling. If you don't have a solid grasp on finance and economics the explanation would be quite complicated and dependent on perspective.

@Blair said:

@KingWilly: Shorting, or going-short is a common method of asset trading in which the seller loans the buyer a specific quantity of an asset (with the assurance that the buyer will return the asset/cost of the asset to the seller at some time in the future). The buyer secures the asset and (typically) liquidates it immediately. At some future date, the buyer is obligated to return the asset back the seller. The buyer yields the difference between the price at the time of purchase and the price of replacement (the current price). The buyer enters the contract assuming the specified asset will decrease in value, whereas the seller yields the asset plus interest paid on the loan.

To explain that differently; a seller loans 10 stocks of Company X (worth $10 each) to the buyer. The buyer converts $100 worth of stock into $100 cash. Two hours later the price of X decreases to $9, at which time the buyer elects to return the asset back to the buyer. Because the price of 10 stocks of Company X has decreased to $9/each; the buyer only has to pay back the equivalent of $90, which makes him a net profit of $10. Conversely, if the price increases to $12/per share then the buyer would pay 10x$12 or $120 in order to return the original 10 shares of Company X (making a net loss of $20).

EDIT: Shorting is typically done through a third-party (or a broker) but, in my example the broker was the seller.

Re: Linkedin and Pandora.

Their value was inflated and buyers paid more than they should've. Result: demand was over-hyped and therefore an inevitable decline in share value occurred. You can extrapolate that basic explanation much further but it is a complex system of buying and selling. If you don't have a solid grasp on finance and economics the explanation would be quite complicated and dependent on perspective.

Hey, look at that. Reminds me of my Series 7 exam.

@crusader8463 said: 

 

Despite the fact that it is bullshit, the fad hasn't had too much of a negative effect on the stream of games coming in, we don't have to worry about it, just all the people that play those so-called games. They need their immunisation, hopefully some people find the cure.