Is Facebook Strangling the Golden Geese?

Facebook is in the process of introducing Facebook Credits, its entry into the burgeoning ecommerce/virtual currency area.  Given that Facebook is the prime destination for people playing social games, this is hardly surprising.   However, in so doing, is it in danger of driving away the sources of its fast-rising revenue?   Is Facebook strangling the geese that lay its golden eggs?

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Dangerous Curves and Social Games 2.0

I’ve written here a few times about the business model for social games and why I think this is a very good area to be working in.  I continue to believe this is a large market in its early stages, with more people spending more on virtual goods in the past year, and with  at least one recent study predicting incredible revenue growth over the next few years. We’ve all seen the meteoric rise in this sector in the past couple of years, both at the top end in Zynga, Playdom, and Playfish (now EA), and in the medium-size and long-tail developers.

But recently, some of the shine seems to have come off this area. This is most clearly seen in the dropping MAU and DAU in the top social games — Farmville for example has dropped from a high of about 83M MAU in March to 66M today.   66M is still a number that no one else can touch, but it’s also a huge drop in a game that had been rising steadily.

And it’s not just Farmville.  If you look at the graphs for the top games that have been around for a while, rising continually (e.g., Texas HoldEm, Cafe World, Pet Society), each shows a peak and a subsequent fall-off.   Notably, this isn’t just due to the age of the game: some more recent games like Treasure Isle and Hotel City show the same dangerous curve at around the same time, even though they haven’t been around as long.  Some like Nightclub City show a rising MAU curve — but a daily users curve that has peaked, indicating that the trailing MAU indicator will show this soon too.  Still others, despite strong PR-backed launches in what seemed like good areas, have fared much worse from the start (indicating among other things how critical repeat play is to the success of these games).

So other than the fact that simply putting out a social game isn’t a license to print money, what does this mean?

Resiliency

Venture Hacks has a couple of pointers to very interesting and complementary articles.  Their post links to one by Michael Wolff, talking about the events in the life of a particular entrepreneur:

“Windows knocked him off the main stage for 10 years; then the Internet seemed to sideline him; not to mention that serious business people (along with many others) thought he was nutty; then he had problems with the SEC (and not insignificant ones); then he nearly died.”

No hyperbole, either.  Getting up and coming back after all that to become possibly the most influential tech CEO on the planet, someone described as “the last mogul”?  That is resiliency — which is the subject of the second article, from Mark Suster at Both Sides of the Table.

Without a doubt entrepreneurs need resiliency, for the exact reasons that Suster brings out in his article (every entrepreneur I know has stories like his).  But this isn’t just for entrepreneurs, it’s something everyone needs.

None of us get through life without our share of setbacks.  As Suster quotes Winston Churchill, “Success is the ability to go from one failure to another with no loss of enthusiasm.”

All of us need to get up and dust ourselves off now and again.  The kinds of things Steve Jobs has been through puts the things I’ve had to endure in perspective. I guess if he can keep coming back, so can I — and so can you.

The New Social Grind: Begging as Gameplay

Zynga recently came out with its latest “social” game, Frontierville.  It features the same cartoony art style and single-player gameplay as their previous games, and reportedly combines elements of others including Farmville in a new skin.

Another thing it does is hone the concept of what I’ve called “ugly viral” — in this case, using begging as gameplay.  Not only does this game make it impossible for you to move forward without others helping you — in a way that involves no social interaction at all —  it’s very up front about this as the poor li’l teary-eyed supplicating pioneer in the illustration (from the FB feed) shows.

So what’s wrong with this?  It’s all in good fun, and it’s cute, right?  Well, maybe.

“12 Things Good Bosses Believe”

I’ve been a “boss” in one way or another for years, leading projects, teams and companies.  I’ve done pretty well at it more often than not — but I’d be hard pressed to say whether I’m a “good boss” or not.

Nevertheless, I saw this article, 12 Things Good Bosses Believe, on the Harvard Business Review blog, and it really resonated with me.   This is a great list of mostly self-reflective items for those who lead teams and companies that emphasize the kinds of issues bosses juggle.  It offers some humbling, potentially skewering insights, and also gives a lot of food for thought.