Is Zynga Betting the Facebook Farm on FarmVille 2?
Sep 6th 2012 1:50PM
Updated Sep 6th 2012 3:50PM
FarmVille may have put Zynga (NAS: ZNGA) on the map, but it's time for a little Farm Aid.
The social gaming leader introduced FarmVille 2 on Facebook (NAS: FB) yesterday.
It's a slick upgrade.
The graphics are richer with smooth 3-D animated characters. After kicking the tires through the introductory level I find it more engaging than the original. The big question -- for both Zynga and Facebook, which relies on Zynga's success for a sizable chunk of its non-advertising revenue -- is if gamers will put up with the relocation.
Zynga has learned that gamers can be fickle. Unlike Hollywood where sequels are as close to a slam dunk, there are no certainties in social gaming. Zynga thought that Mafia Wars players would love Mafia Wars 2. They didn't.
Mafia Wars 2 now has 460,000 active players. That may seem like a lot, but it's not. Stacking up Mafia Wars 2 to Zynga's larger games on Facebook shows FarmVille, CityVille, and Hidden Chronicles having 19 million, 18.6 million and 10.7 million players respectively. For comparison's sake, Electronic Arts' (NAS: EA) The Sims Social has 14.3 million monthly players on Facebook.
Yes, these games have more players than Activision Blizzard's (NAS: ATVI) World of Warcraft, but it's an entirely different business model.
Activision Blizzard make a ton of dough off software sales, subscriptions, and virtual items. In the free-to-play realm of social gaming, monetization basically comes down to selling virtual goodies that make the game easier and more enjoyable.
Zynga isn't going to abandon the original farmstead. FarmVille and FarmVille 2 will coexist, and investors may want to check up on Facebook from time to time to see how the active monthly users for both titles are holding up. As long as the sum of both games is above 20 million, the decision to upgrade the franchise will likely be a success.
Zynga and Facebook investors can use the hit, given the way that their respective stocks have cratered since going public.
It all starts with clearing the land and planting a seed.
Fox and the hound
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The article Is Zynga Betting the Facebook Farm on FarmVille 2? originally appeared on Fool.com.The Motley Fool owns shares of Facebook. Motley Fool newsletter services have recommended buying shares of Activision Blizzard and Facebook. Motley Fool newsletter services have also recommended creating a synthetic long position in Activision Blizzard. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. Longtime Fool contributor Rick Munarriz was never much of a farmer. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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