Tag Archives: zynga

Freemium Games To Take a Hit

While it is no secret that gaming apps for mobile devices are popular, the business models used by them vary and recently one of the most popular models has taken a hit. One of the more popular business models is a freemium game, where the basic game is free but then there are purchase options available. The most popular Zynga games, Farmville and Cityville, are examples of this business model. Freemium games also draw in money by using ad servers to render small ads in a non-obtrusive manner. This is why the social media agency needs to take note of the recent court happenings concerning freemium games.

A San Jose court recently denied a motion to dismiss a class action suit against Apple. Children are playing some of these games and then making purchases in the Apple Store which later sends parents the bill. What is at issue is how the Apple Store functions for its purchases. Instead of changing the Apple Store’s mechanics Apple is instead taking the fight to the courts and is, so far, losing.

If the courts hamstring the business model, then it could go either way for the
social media agency. Apps will rely more and more on advertising or move to a user purchase model. The overall change, however, might be a drop in the number of games being developed because of the apparent superiority of the freemium model. The industry might keep up with a slackening of new projects in development, but there will be less diversity for digital advertisers to work with.

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Project Zynga To Offer A Facebook Free Space

   On Tuesday Zynga hosted its “Unleashed” event where they announced Project Z. Project Z will be a social network for discussions and sharing of games. Its purpose is to give Zynga some independence from Facebook, even though moving from Facebook to Project Z will remain nearly seamless and Facebook still provides Zynga with most of its income and user base. As part of that independence Zynga has recently launched CityVille on Google+ to help create some diversity.

It is unknown if Project Zynga will offer advertising. The games use the freemium model and so far they have been working for Zynga as an income stream. Those games, however, required the social networks so Project Z might very well offer some advertising to help subsidize income as it gains a user base. This is a potentially lucrative location for digital ads, especially given how sticky the pages might be as users play games within the page.

Project Z will host existing Zynga games as well as some new games announced at the event: CastleVille, Zynga Bingo, Hidden Chronicles, and Mafia Wars 2. One concern for the digital marketing firm is the sustainability of Project Z. This move seems to be about the upcoming Zynga IPO to demonstrate some independence from Facebook. After the IPO when that independence is no longer a driving concern, will it then make sense for project Z to remain a keystone of Zynga games? It remains to be seen. Until then it should be a place worth some investigation as an advertising platform.


Project Z

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