What Zynga's game closures say about the social gaming market

The recent hard times for the social gaming market have been harder on some games than others. Last week, social-gaming mega-publisher Zynga decided to shut down two well-established parts of its catalog. First, the servers for Roller Coaster Kingdom (RCK) were shut off, then Ponzi Inc., a promising game Zynga got as part of a Challenge Games acquisition less than a month ago, went dark for good.

So, what can we learn from the abrupt termination of these two games? Well, one lesson seems to be that the standards for success in social gaming are going to keep increasing -- at least for the big publishers. Despite their declining popularity, both Ponzi Inc. and Roller Coaster Kingdom had a relatively decent number of monthly active users when they were closed -- 221,000 players for Ponzi and 1.2 million players for RCK. That might not seem like much compared against Farmville's industry-leading 62 million monthly players, but it probably doesn't seem like chump change to many struggling social game makers just getting their start.

Obviously Zynga's resources are limited, and devoting resources to a game that attracts "only" one million players a month might not make sense -- especially when those resources could be put towards a more popular game. That said, I can't imagine letting the servers for these games limp along would have been a crushing expense for a company like Zynga. In fact, those costs would probably go down quickly as the player bases continued to shrink (although maybe not quickly enough -- a smaller user base probably eliminates some of the economies of scale that help amortize costs for mega-games).
Of course, there are other costs associated with keeping smaller games in a catalog -- technical support, ad sales, bug-catching programmers and database maintainers -- that were eliminated along with these games. Zynga likely saw the declining numbers for both games and decided these costs just weren't worth it anymore. Somehow, Zynga made the determination that the writing was on the wall for these games -- that the players had simply grown tired of playing and that it wasn't worth making the investment to draw them back with new content, new offers, and new advertising (We're guessing the ARPU numbers for both games may have played into this decision).

The implications of this kind of decision are pretty scary for Facebook games as a whole. Is there a time limit on how long shallow social games can survive without constant infusions of new content? Will players eventually get tired of even mega-popular games like Farmville and Treasure Isle and move on? Will companies abandon these games as soon as the numbers start to dip, or will they devote possibly futile time and effort into getting them to rebound? What happens to a game that attracts a lot of players but not many that actually want to pay money for virtual items?

Speaking of paying money, the shut down of Ponzi and RCK doesn't just represent the end of an amusing pastime for hundreds of thousands of people. It also means the destruction of a lot of virtual property that many players had invested real money in. Does Zynga just get to keep the money they pocketed from selling these ephemeral items, now deleted forever from some internal server bank?

From a legal standpoint, they probably do (let the EULA-signer beware), but from an ethical and player-relations standpoint, simply destroying people's virtual property is not a good move. Zynga obviously realizes this and is giving players some consideration for their in-game investments. Outstanding balances and recent purchases in Ponzi Inc. will be transferred to Frontierville credits, while Coaster Cash used in RCK will be converted to Favor Points in Vampire Wars.

Still, this seems like a less-than-ideal solution, especially if players don't want to play the game the new credits are being offered in. It seems doubtful that RCK players will be flocking to Vampire Wars, considering how different the two games are. Perhaps these kinds of problems will start to go away as the industry moves to a unified Facebook Credits model.

All in all, the closure of Ponzi Inc. and Roller Coaster Kingdom are barely going to send a ripple through the larger social gaming industry. But as more and more social gaming experiments are sacrificed to the altar of the bottom line, and as companies continue to consolidate their efforts towards a few mega-games, don't be surprised if the social gaming landscape of the near future starts to look very different from the one you see today.