FarmVille broke all sorts of records as the fastest-growing and largest application on Facebook. But now another Zynga production, Café World, is looking set to best it. The app has grown from 0 to 8.6 million users since it launched a week ago, according to AppData, based on a combination of cross-promotion from other Zynga games (including FarmVille) and advertising on Facebook.
This is especially good for Zynga, as we believe the company could try to go public as soon as next March. Café World has a baked-in revenue model in the form of virtual goods. It’s another big hit using the so-called “Zynga Playbook” for making apps grow, meaning the company can further justify its 2009 financials to public investors. We’ve heard the company is already on track to make $200 million this year.
However, the effect on the overall social gaming developer ecosystem is not so clearly good.
Café World is not a clone of Playfish‘s Restaurant City, but there are many similarities — like the fact that both are virtual restaurant games, where users create restaurants, cook and sell virtual food, etc…. Specific similarities include: The layout of the restaurants, the view of the street on the side, the design and animation of characters — especially walking and eating. See our review of the two games for more on that. Café World has done some features in a more interesting way, like restaurant expansion.
In context, Restaurant City is currently the eleventh largest application on Facebook, with 16.2 million monthly active users. It is one of the company’s crown jewels, the other big one being Pet Society, at number 6 with 19.5 million monthly active users. The company is the second largest developer on Facebook, with 56.9 million monthly active users. But Zynga is the largest with 140 million, if you add up all of its applications (note: this number is not de-duplicated).
To get a sense for what Café World means for Restaurant City, take a look at what happened to Slashkey‘s Farm Town before and after Zynga launched FarmVille in June. As FarmVille grew, Farm Town’s traffic leveled off, even though it is staying steady with nearly 19 million monthly active users. The same may be happening for Restaurant City, as its traffic has also leveled off in the last week. Although none of those stories have been fully told — Playfish’s Country Story, also a virtual farming game, is smaller but is still managing to grow. It has more than doubled in the last 90 days, from 3.15 million to 7.34 million monthly actives.
What Zynga is showing is that it is willing to copy, then innovate on high-quality games perfected by others, and use its market size, cash, and optimization techniques to do that. Its cross-promotion efforts include strategically placed buttons for Café World in other games, including hits like FarmVille, Mafia Wars, YoVille and more. In terms of money, we’ve heard from multiple sources that Zynga is spending $50 million on Facebook ads this year. Meanwhile, Zynga isn’t just coming out with quality new games. It keeps pumping out new versions of existing games, like its recent expansions of Mafia Wars.
For any company that develops a game that gets traction, Zynga has the ability to come in and do it better.
It is not clear what any other developer can do to stop this, besides find more effective ways to build and market their own apps. While Zynga is sometimes busted for things like spammy invites, many other developers have been or actively are guilty of the same. Perhaps a group of VCs or a private equity firm will step in with $100 million, roll up some of the smaller yet successful developer shops, and go to war? Perhaps more established gaming companies will make acquisitions and devote more resources to social gaming? Yesterday, casual game company PopCap raised $22.5 million in a large part to push its social gaming effort faster — this is after ten years of the company growing to 240 employees without ever taking a round. And it was not surprising to hear, earlier this week, that another large rival, Playdom, is looking to raise more money.
To dig deeper into the virtual goods market, check out our new report: Inside Virtual Goods: The US Virtual Goods Market 2009 – 2010.