
Game Over: Zynga Shuts Down PetVille And 10 Other Titles - chrisacky
http://techcrunch.com/2012/12/30/zynga-shuts-down-petville-fishville-mafia-wars-2/
======
ChuckMcM
As an operations guy I find this really interesting. What I find interesting
is the cost vs revenue of these games.

Obviously to me there is a bunch of up front costs, art assets, game play
design, etc. But once you've got the basic HTML5 code going, and the art
assets in place, what are your on-going costs?

Clearly there is going to be bandwidth at scale its like $2 - $3 per megabit
per month, you've got power/cooling in a colo, so that's going to cost you
maybe $3K/month for a 42U rack's worth of servers. And presumably you've got a
couple of opsen types tending and feeding that rack. But they are split across
say 100 racks so 1/100th of their salary/benefits per month, lets call it
$160/month [1]. So lets give the game 500Mbits of bandwidth a month (that is
4.3TB of data transfer per day) We can put 20 beefy servers in our 42U rack
with 20TB of disk space and 1/2TB of flash in each (we do this at Blekko)So
400TB of disk space and 10TB of flash, and if you wanted 3.8TB of RAM
(192GB/server) and 480 threads of execution.

Now I'm making a huge assumption here, and so I'm calling it out, but my
assumption is that the "game" is essentially a front end on a database, where
player actions become database transactions, and those transactions show up as
changes in the game 'world', further those transactions are both shared
(everyone in the game can see them) and private (only you see the changes). So
a system that is slightly less beefy than our setup (the Sun setup) gets 10M
transactions/minute in the TPC-C benchmark [2]. At that level it suggest our
stack-o-servers might support 1 - 2M players.

So our monthly cost is on the order of $6,500 and we're hosting say 1.5M
players. That means we need to extract something like a half cent per month
out of those players in order to pay for running the hardware. For a gross
margin of 50% that is about .86 cents.

I may be completely off here somewhere, please point out my math or
configuration errors! It seems like one could essentially run a game 'forever'
until that average number got too low and then you would have to wind it down,
but one wonders about how hard it is get get someone to pay a penny a month.

I did leave out the maintenance (warranty) cost of the servers, a recent quote
from a server vendor had 'everything covered, onsite tech' for
$175/server/month. So if you wanted to add that in then there would be another
$3,500/month to cover.

It looks like a license to print money but clearly there is something here
that sucks all that money away. Curious what it is.

[1] That is two ops people with a combined salary/benefit package costing
$200K/year or 16K/month which divided by 100 (1/100th of their work) is $160.

[2]
[http://www.tpc.org/tpcc/results/tpcc_perf_results.asp?result...](http://www.tpc.org/tpcc/results/tpcc_perf_results.asp?resulttype=cluster&amp;version=5%&amp;currencyID=0)

~~~
KC8ZKF
You are overlooking opportunity costs. All of your players could be playing a
more profitable game instead.

~~~
ChuckMcM
Ok, so you're saying I need to measure this stack against another game that I
could ship on this stack. So leaving it generating revenue $X is a loss of
additional revenue $Y-$X if I deployed a game that had $Y revenue on the same
hardware. Does that about cover it?

The assumption in that though is that game $Y cannibalizes $X. Which is to say
if you also release a new game $Y your returns on $X go away.

And while I see that as true with similar/derivative games "CashVille 2" is
just like "CashVille 1" but with unicorns or something, I am not sure I'm
persuaded that we do accrue an opportunity cost against _different_ game. This
is the root of the reasoning in my print money comment.

The reasoning is that if this config pays for the development cost and then
generates marginal $ over time, you just add another stack to increase the
marginal dollars you get. A writer releasing a second book doesn't 'cut into'
sales of the first book, if nothing else they can sometimes _increase_ the
revenue of the first book by getting wider visibility.

I'm interested though in how we might reason about the opportunity cost here.

~~~
tedunangst
Unlike books, I think the market for these games is inelastic. A player is
going to devote four hours per day to some game, chosen from the available
games. You want that to be your most profitable game. Allowing them to play
other less profitable games is not optimal.

If you somehow knew I was going to buy exactly one book, you'd do your best to
make it a hardcover and pull the paperback off the shelf.

~~~
ChuckMcM
So far, for me, this is the most compelling reasoning. In theory to incur an
opportunity cost you have to be constrained in some way, clearly Zynga isn't
constrained in adding hardware or people (they are laying off in this case)
but I can see how the customer's attention span is a constraint. If they have
a fixed amount of game time then you're competing for your place in that time
slot.

------
robertelder
I started playing farmville over a year ago to learn about what made Zynga so
successful. Farmville is the lowest quality game I have ever seen. For a
while, every time you loaded the game there was a php array of what looked
like debug information echoed to the page just before the game loaded. There
were numerous times where I would queue up a bunch of work in the game, only
to get a message saying that "Farmville has been enhanced, please refresh to
continue". Refreshing the page would mean I have to click on all those trees
again. Every time you load the game you need to close about 5 promotional
offers attempting to get you to buy farm cash, or invite your friends to play
the game. The game employs emotionally manipulative tactics to get people to
use farm cash (in game currency you pay for). Every once in a while you will
get a pop up with a picture of a sad horse which needs shelter. It will run
away if you don't feed him now! There are also a lot of annoying promotions
that pop up and you are not given the option dismiss them. The only button
provided is "Start now" or "Tell me more...". The game if full of bugs, and
occasionally has pop up windows that have no text and empty buttons. I
attempted to log in for the first time in 4 months today, and I could not play
the game because it lags so bad despite my having a new computer. To be fair
my map has all possible spaces filled with lime trees, so that is where the
lag comes from.

~~~
samstave
I respect your efforts. It would be great to see a spectrum analysis of all
their games in this way, if for nothing more than to show, holistically, how
bad of a company Zynga is...

To be fair, I'd like to see the same for the KixEye games as well - as they
are making money hand over fist (according to a good friend who works there).

~~~
slig
See "What I Learned From FarmVille - So You Don’t Have To Play It"
<http://news.ycombinator.com/item?id=1940778>

------
alexholehouse
With these kinds of games I really surprised Zynga didn't provide a more
graceful wind down. As the article suggests, there must be HUGE numbers of
people with real emotional attachment to their characters/pets, who almost by
definition are Zynga's most loyal customers. SURELY a business decision which
exclusively hurts those who are stakeholders in the games you produce is, from
a long term perspective, just a horrible move for customer loyalty and
reputation.

If I'd put 4 years into a pet on Petville, only to have the game basically
deleted from under my nose, there is no way I'd _ever_ become involved in
anything Zynga does again.

[Disclaimer, I've never actually played any Zynga games, so this is based on
second hand conversions/observations]

~~~
patio11
It's possible that some of these games had paying user retention numbers such
that maintaining customer loyalty among the holdouts was not a hard
requirement. I don't have a convenient way to look up MAUs at the moment, but
many apps languish at say 10k. That would imply a few hundred paying
customers. The majority of them would be worth whole tens of dollars in LTV.

One of my rare compliments to Zynga: they aren't stupid and it is highly,
highly unlikely that the live teams' business analysts made a worse decision
based on the data than an outsider would make based on a press release.

~~~
robryan
I think it would be a straight numbers decision as you guess. A lot of
companies would worry about how this would impact those high value and long
term customers and how it could effect retention in other games and future
projects. I think Zynga is passed that point now though (if that ever was a
concern for them, they have never really been a games company a rational
person would have a strong connection to).

Pretty much all the big name MMOs released in the past 10 years have
gracefully downsized and maintained maintenance for the player base.

------
raganwald
The article was amazingly sympathetic to Zynga's management. Almost as if...
Hmmm... Almost as if... Someone sent them a press release and they reprinted
it verbatim in exchange for an exclusive interview or an advertising buy.

~~~
ChuckMcM
Now now, are you saying coverage on Tech Crunch can be bought? I'm shocked I
tell you, shocked!

~~~
SimHacker
"Your winnings, sir." (Transfers 1,000,000 Facebook credits to Tech Crunch's
account.)

------
mistercow
>But Zynga’s share price got decimated over the past year.

Well no, not really. I mean, yes, I guess it technically did. Then it got
decimated again. And then it got decimated 12 more times.

~~~
monochromatic
I feel like I'm fighting a losing battle with "decimate." Glad to see there's
somebody else on HN still fighting the good fight though.

~~~
koide
Now that your position has been decimated by history, you could focus your
efforts on one of my pet peeves that's been appearing a lot on HN: "binary
blob"

Type either "blob" or "binary lob." PLEASE!

~~~
jcurbo
What? The b in blob does not stand for binary.

~~~
ars
It does.

But I'm kinda curious what you thought it stood for?

~~~
jcurbo
It doesn't stand for anything in normal speech.
<http://oxforddictionaries.com/definition/english/blob?q=blob>

In the context of 'binary blob' I think it would be clear it just means an
amorphous mass of bits and not some Jargon File definition (which in turn is
clearly a play on the regular word in itself).

------
programminggeek
You know what the right play on Zynga was? Cashing out and putting the money
elsewhere. Instead, Zynga is the classic case of thinking that growth is
basically infinite and there is unlimited demand. There are a limited number
of gamers willing to buy virtual goods on Facebook games, and there is nothing
special that Zynga does on mobile that other companies don't do as well or
better.

Take the money and run. Now it might be too late.

~~~
loceng
Well, can't really know for sure, though from the outside it didn't really
look like there was much innovation outside the addictive game model they
first implemented. And then they got into defensive mode buying up competitors
/ talent, however individual developers can always do things cheaper and
create breakaway games that will slowly take from the pie.

~~~
Tloewald
Were they in any way connected with kingdom of loathing? If not, then their
only innovation was integrating kingdom of loathing with nicer graphics and
facebook (i.e. not the game mechanics or business model).

~~~
zck
No; Kingdom of Loathing is run by Asymmetric Publications
(<http://asymmetric.net/>), which is only a few people:
<http://asymmetric.net/people.html> .

And if Zynga didn't steal game mechanics or the business model from KoL, what
did they take? While KoL was an early browser-based game, it certainly wasn't
the first
([https://en.wikipedia.org/wiki/List_of_multiplayer_browser_ga...](https://en.wikipedia.org/wiki/List_of_multiplayer_browser_games)).

~~~
Tloewald
Browser is nothing to do with it. KoL's mechanics are exactly those of Mafia
Wars and the like (including both the core concept of "energy" and the
business model around it).

~~~
newobj
And those mechanics are exactly like dozens of BBS door games from the 80s and
90s, so...

------
kitcar
Any thoughts as to why they didn't sell the titles rather than shuttering
them? I'm thinking maybe they share code across games and don't want it in
outside hands, or maybe they weren't revenue positive, or perhaps don't want
to hand over any portion of their user database to a competitor. Any other
ones I am missing?

~~~
anatari
Because it makes very little business sense to do so. The upside of selling is
near zero because it would not make a dent in their bottom line or their
future outlook, while there are many downsides to selling, some of which you
have mentioned.

------
andrewcooke
"Zynga’s share price is down 3.52% to $2.33 from its $10 IPO price a year ago"

???

~~~
mmahemoff
_slight_ oversight there. From the comments:

Should be 76.7%. 3.52% was the amount it was down on Friday, December 28th,
2012.

~~~
uptown
decimated...

~~~
wwwong
If we're being nitpicky, then 'hammered' would be more descriptive than
'decimated'. Decimated would imply only a -10% drop if we stick to it's
figurative definition

~~~
saraid216
If we're being nitpicky, "hammered" means to work something out laboriously.
Nothing was worked out. A stock's value moved in a negative direction.

------
jkat
I'm a big gaming fan, and it seems like they could have explored and expanded
the world of casual gaming; but they instead focused on a cash grab.

~~~
hdra
yeah... good ol' times where I associated casual games with companies such as
Playfish instead of Zynga... You know, Zuma, Diner Dash, Sally's Salon.. Where
the companies doesn't actually try to get you addicted to their games..

------
alan_cx
So, these are virtual pets and what-not, that people have kept "alive" and
happy for years, right?

So, is it really that hard to port the player's data in to a stand alone desk
top application that at least the character can sort of be preserved in, or
more? Perhaps let the open source minded folk perhaps keep "feeding" the
application? Or something like that. I would imagine that players would be
happy enough to pay a reasonable amount for that. Or perhaps do a data dump
for players so that some representation of the character exists.

I kinda think developers should have something like this in mind before they
start, especially where kids and money are concerned.

~~~
zacharycohn
That's nice from the human interest angle, but when it comes down to it Zynga
is a publicly traded company now. I don't recall if they're profitable or not
at the moment, but they are hemorrhaging shareholder trust.

They could either spend more time (and money) on letting people port their
virtual corn to a local machine.. or they could cut the product and
immediately start moving toward profitability.

When your stock price is $2.33... it really isn't much of a choice.

------
sanarothe
This is really sketch, in my opinion; There are people with hundreds of
dollars invested into their facebook game microtransactions. "Take the money
and run" to a whole new level...

------
atesti
Of course what Zynga created cannot really be respected as or compared with
proper games, but it's still sad that it's gone. How will the Moma put games
like Farmville (which are an important piece of history of computers and
FaceBook and stock markets) in an exhibition once the servers have been turned
off?

Makes one really want to buy Sim City 5 (which will do calcuations in the
cloud and not be playable without internet connection). Today EA shut down
games like Fifa 2011!

------
pixie_
They need to figure out a way to persist these games. Either sell them off, or
open source them or something. It makes me rage when companies lock in users
to a game and shutdown the servers.

~~~
phaus
Their games pretty much amount to marginally interactive spam. I don't think
that too many people who are smart enough to code would be willing to put in
the effort to continue developing them, because the games don't have enough
depth to capture an intelligent person's attention.

Also, it's doubtful that the company would be interested in open sourcing
them, because they don't really care about gaming or gamers, they just saw a
quick way to make money.

There's nothing wrong with having money be your top priority (to each their
own) but in Zynga's case it's obvious that it's their only priority.

~~~
Jare
Zynga has actually open sourced a bunch of stuff. Nothing earth shattering,
but there's good stuff there. See <https://github.com/zynga> and their tech
blog <http://code.zynga.com/>

~~~
phaus
Thanks. I guess I stand corrected on this count.

------
hornbaker
If you're a dev with Flash experience from the PetVille team looking for an
opportunity with a much smaller (but profitable) company, please get in touch
with me. Remote work ok.

------
djt
They may be doing this to switch customers to their other titles before a new
competitors game comes out

------
twiceaday
Good.

------
pebb
Time to issue stock buyback to return money to shareholders and shut the
company down.

------
lucian303
Yeah, predictable three ... now four years ago. Zynga and the rest. Can you
say bubble burst when FB finally goes down?

