CastleVille Traffic: The Story So Far

With Zynga’s IPO expected as soon as next week, the developer is likely hoping for a strong start for CastleVille, its newest game for Facebook, to appeal to potential investors.

Zynga announced earlier this week that CastleVille had broken 5 million daily active users in six days, making it Zynga’s fastest-growing Facebook game ever. The game is one of five Facebook titles released in the last two quarters and will appear on Zynga’s balance sheet under results for Q4 2011. The other Facebook games released in Q2 through the beginning of Q4 include Empires & Allies (June), Words With Friends for Facebook (July), Adventure World (September), and Mafia Wars 2 (October).

With one new Facebook game launching almost every month, what does Zynga’s traffic look like overall? In a recent amendment made to its form S-1 filing, Zynga said daily active users have declined in Q3. We’ve also seen less than a 10% increase across Zynga’s monthly and daily active users on Facebook in the past 30 days. This suggests that, while CastleVille is growing at a rapid rate, there is not a large increase in the total number of Facebook users playing Zynga games as a result of the game’s growth compared to recent periods before the game’s launch.

The bulk of CastleVille’s users could also possibly be coming from other Zynga games on the platform, depending on Zynga’s cross promotion strategy. Zynga’s top five games in size — CityVille, FarmVille, Texas HoldEm Poker, Empires & Allies and Mafia Wars 2 — are in a period of flat or declining DAU in recent months. FrontierVille — the closest to CastleVille in genre and gameplay style — no longer appears in Zynga’s top five because MAU and DAU for the game dropped sharply after its users apparently failed to adopt the expanded version, Pioneer Trail, which was released in August. In short, for the past few months, users were losing interest in the older games, which may have prompted them to try new Zynga games launched during this period, looking for a new “favorite.”

This leads to a potentially challenging situation for Zynga, as each of the give games released in the last three quarters are in different game genres, which means that there is no easy substitute of one game for another. On the positive side, this means new game releases aren’t directly cannibalizing older games; but as a negative, the new games might struggle to retain existing Zynga users. A CityVille player, for example, may have at first adopted Empires & Allies because of the similar citybuilding mechanic — and then abandoned the game because the core combat element was not as appealing. Similarly, a FrontierVille player dissatisfied with the Pioneer Trail expansion may have initially left the game for Adventure World, only to abandon it when the core exploration gameplay failed to provide the desired gameplay.

To keep these new game releases going strong, Zynga would need new players to come into the games — and stay — a task that is generally challenging for all developers without spending significantly on new customer acquisition. Already, three of the five games released in the last three quarters have peaked in DAU within the first month or so for each game. Words With Friends is a notable exception as the game is cross-platform enabled for iOS and Android with Facebook Connect, which affects its DAU.

The question for CastleVille, then, is not how fast it’s growing now — in the short term — but whether it can keep up growth rates past its first 30 days. CityVille and FrontierVille both maintained their rapid early growth rates for around three months before going into decline, which is more consistent with life cycles of other social games on the Facebook platform. If CastleVille can mimic this pattern, not only could it potentially eventually unseat CityVille as the largest Facebook game, but we could also anticipate that the game might enjoy a longer life on Facebook than games that peaked in traffic too early.

To that point, we can see that CastleVille at least stands a chance at holding on to many of Zynga’s existing users that left FrontierVille, as the core gameplay elements are very similar. Some of the citybuilding may also retain ex-CityVille players, and Zynga has hinted that there could be a possible multiplayer combat element added in the future, which could appeal to Empires & Allies players.

The key to CastleVille’s long term growth, however, is gaining new users. On Facebook, developers can only do so much to increase that through spending on user acquisition — the rest depends on the social discovery components Facebook offers to bring viral growth to social games. Off the platform, Zynga could also add to its already substantial cross-promotion platform using mobile games. With a reported 11.1 million DAU on mobile in October, there is a potential chunk of Zynga’s audience that hasn’t yet been exposed to CastleVille. Attracting users from other social networks or from an independently-owned games portal is also another way Zynga could bring more users into the game in the long run.

Beyond traffic, we can only speculate as to what CastleVille will do for Zynga’s revenues. It could be that while a game-every-month release schedule appears to flatten traffic growth on Facebook, that it actually improves revenues overall as Zynga continues to improve at monetizing its audience. Zynga reports that average bookings per user rose from $0.051 to $0.058 even as DAU fell in Q3. If we use that bookings per day rate from last quarter, that suggests that CastleVille may be earning $342,200 per day right now on its 5.9 million daily active users. Because it’s a new game released in different market conditions from Q3, however, CastleVille’s bookings per day may be fairly different from the average across Zynga’s portfolio of games.

CastleVille launched November 15. Zynga’s IPO is expected as early as next week after the Thanksgiving holiday.

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