December, 2009Archive for

I was recently reading one of my favorite blogs (Seth Godin’s blog) and came across an entry that confirmed much of my thinking about the offers controversy in the social gaming space.  In my last blog post, I said that the discussion of offers for social media games such as Mafia Wars has been over-hyped.  In Seth’s blog entry, he discusses all of the “bloatware” that is included these days with computers from all manufacturers (http://tinyurl.com/y87l8l8). 

In the discussions about misleading offers, most of the commentators implied this problem is unique to social games and this exploitation will lead to the downfall of social media games.  Seth’s blog shows that scams are showing up in many industries and companies will do almost anything for a buck.  The fact that the PC retail industry is of magnitude larger than the social gaming space despite these practices shows that the offer controversy is not the industry breaker some claim (and others hope). 

Please do not infer that I am condoning misleading offers. I do feel they hurt the consumer and thus hurt the industry.  There will, however, always be companies that will do anything for revenue but these are the companies that will destroy our industry.

Lloyd Melnick
Chief Customer Officer

In my last entry, I discussed my feelings about the hype around “Scamville,” which revolves around the industry controversy about offers.  I am not going to defend misleading or illegal offers.  There are bad fish in every Fishville, but offers are as good for the end-user as for the game developer.  We often ask our staff to play competitors’ Facebook games to benchmark. What is interesting is that after they have played them for a week, we’ll ask if and how much money they spent.  While sometimes someone will use direct pay methods (i.e. Paypal) to purchase virtual goods, the majority use offers to enhance their game play experience. 

The big question is:  what do they think of using offers to get virtual items?

Many expressed their approval because they enhanced their social gaming experience.  They were able to play the game longer and enjoy it more than people who just used the “free” elements.

Interestingly enough, many people stated that they did not feel like they were spending money.  These days everyone is on a tight budget and they usually did not have the luxury of spending $5-$100 on a game, especially around Christmas.  Instead, they could gain the same benefits and their bank account (or credit card debt) would not be affected.  They realized the game companies were able to monetize the offer but it didn’t matter because they gained something without direct out of pocket cost.

These are two very strong drivers that point to the continued existence of offers, but, more importantly, social game companies should not be fighting the use of offers.  The results are still the same: offers are good because the end user is happier with the enhanced gaming experience, the advertiser is happy as they are getting a very measurable marketing spend, and the game company has a nice revenue stream. 
 
The best idea is to embrace the honest offers while declining the misleading offers. Beneficial offers are a big reason social gaming has such potential to everyone.

Lloyd Melnick

Chief Customer Officer

I tried to avoid commenting on the “Scamville” controversy as everyone else seemed to be piling on.  Thinking about the situation more, though, and talking to our staff, I feel I should weigh in.  First and foremost, the “scandal” reminds me of my days working for the government in DC when the media used the phrase “inside the Beltway.”  This term meant the discussion of issues that politicians felt were important, but really did not matter to the millions of people who did not reside in Washington, DC. 

While Scamville has captured the hearts and minds of bloggers and social game industry insiders, virtually all of the 72 million people who play Farmville and the hundreds of millions of other social gamers don’t care.  They understand what offers are and that there is a cost to getting something for nothing.  More importantly, they are focused on enjoying the games and interacting with their friends.  It is obvious by looking at the DAU and MAU figures for the top games (and virtually all games) that this tempest on the blogs had virtually no effect on the customer. I am sure they are more concerned with what they will buy their uncle for Christmas than what Mark Pinkus said to some aspiring entrepreneurs.

I actually saw a casual download game company trying to use the controversy about offers to scare their customers into avoiding social games.  That smacks of desperation.  Instead, they should be focused on how to provide the same level of value to their customers as the social game developers; hence, the much higher growth in the social gaming ecosystem.  The social gaming phenomenon is here to stay.  It’s going to continue to grow exponentially because people love the social media games and opportunities continue to abound.

Lloyd Melnick
Chief Customer Officer