So much for the first generation of big Facebook/MySpace social application startups. Slide and RockYou both got huge valuations in venture rounds. But a new generation of application developers has taken center stage and are racking up big revenues and their own eye popping valuations: Zynga, Playfish and Playdom.
All three own popular social games on Facebook and MySpace. Zynga’s Farmville has 61 million monthly users. Playfish’s Pet Society has 21 million monthly users on Facebook. And Playdom has 16+ million monthly users of Mobsters on MySpace and Facebook Combined.
All three companies are getting a ton of press and investor attention. Zynga wants to go public next year. Playfish probably already got bought by EA for $400 million or more. And Playdom probably raised an unannounced big chunk of venture capital over the summer.
These three companies may be generating as much as $300 million annually on sales of virtual goods. Need a shotgun to do that next job on Mobsters? No problem. Pay with a credit card, paypal, or your mobile phone and it’s all yours. And people are obviously very willing to buy these virtual goods. Nothing new there.
The goal of all of these games is to get to a higher level, and generally have more fun growing things or killing things faster than your friends. Get addicted to the free version, then start spending to move things along more quickly. Once people are committed, it’s easy to get them to pay. You can read all about it on Business Week.
Except Business Week didn’t mention the dark side of the business at all. → Read More
It’s a day late, but social game site (and Zynga-antagonizer) Playdom has finally responded to our request for comment on the lawsuit and temporary restraining order they got hit with earlier this week (all the legal documents are here).
The statement, emailed to us earlier today, is short and sweet and contains very little information at all:
This lawsuit comes as no surprise given Zynga’s penchant for litigation. We do not believe in using unnecessary litigation as a business strategy, and we are troubled to see an industry as bright and promising as ours weighed down by such tactics.
We have no interest in Zynga’s “Playbook” or “secret sauce.” Our strength comes from our 111 talented people, and we will defend ourselves vigorously against this distraction.
The lawsuit stems from seven former-Zynga, now-Playdom employees who may or may not have taken a few proprietary documents with them to their new jobs. Among the documents Playdom is accused of stealing is the fast-becoming-legendary/mythical “Zynga Playbook”: “The Zynga Playbook is literally the recipe book that contains Zynga’s “secret sauce,” and its contents would be invaluable to a competitor like Playdom,” says Zynga in the lawsuit. → Read More
This is an update to our post earlier today on the Zynga/Playdom trade secrets litigation.
Below are the three documents relevant to the case. The first below is the original complaint that outlines the entire lawsuit. The second is a memorandum authored by Zynga supporting their request for a temporary restraining order, the third is the order granting Zynga a temporary restraining order against Playdom and the other defendants.
The documents are below: → Read More
There’s no love lost between competing social gaming platforms Zynga and Playdom. Earlier this year Zynga sued Playdom over what they called misleading ads. That litigation appears to remain outstanding, but Playdom has since changed their advertising practices.
Now there’s a much more serious dispute between the companies. Yesterday Zynga filed a lawsuit against Playdom and a number of other defendants in California state court. Among the many causes of action: misappropriation of trade secrets, breach of contract, breach of the duty of loyalty, tortious interference with contracts, tortious interference with existing and prospective economic advantage and unfair competition. The defendants include four ex-Zynga, now Playdom employees as well.
What this boils down to: Playdom has allegedly hired away a number of Zynga employees, and those employees have allegedly taken key information and documents from Zynga and have given them to Playdom. Among the most important documents that were supposedly stolen: The Zynga Playbook: → Read More
It’s been just under one year since social-gaming startup Playdom launched Mobsters, which has grown to become the #1 game on MySpace with 13.5 million total installs. Now, the company is taking the incredibly popular game mobile with its first iPhone App, dubbed Mobsters: Big Apple (iTunes Link). And while it may not be the first such mafia-related game on the iPhone, it still has a few tricks up its sleeve that could turn it into a major hit.
Now, Playdom isn’t close to being the first mover here — we covered iMob back in January, and we’ve seen competing social gaming companies like Zynga and SGN launch similar games based on the Mafias, Vampires, and a number of other themes. → Read More
When I wrote my BusinessWeek column on Zygna a while back, every venture capitalist in the Valley told me that Playdom was the company’s biggest competitor.
After all, it competes game-to-game, with similar mob-style and poker games, and was said to be doing the same revenues as Zynga with much higher profitability. (As my column pointed out, Zynga’s revenues are more like double Playdom’s—and since I’ve heard the discrepancy is even greater.)
As you’d expect Zynga’s CEO Mark Pincus pooh-poohed Playdom as any sort of threat. But tellingly, he said the company he was worried about was UK-based Playfish. So, while I was across the pond, I decided to see what the fuss was about and sat down with Playfish’s founder and CEO Kristian Segerstrale. I came away convinced this was one of the hottest companies to watch in the UK. Here are five reasons why. → Read More
Playdom, a popular social gaming developer on MySpace, is moving to a studio model, similar to the model of competitor Zynga. Playdom has largely flown under our radar until now, but they’ve built up some very popular social networking apps on MySpace, and are also moving to Facebook as well.
Adopting the studio model means that Playdom will have multiple independent teams working on different games. To head up the two studios, Playdom has brought in substantial talent from successful gaming companies. Former Director of Game Design at Zynga, Dave Rohrl, will oversee a studio focused on new intellectual property and former Studio Director at Pogoa/Electronic Arts, Sean Clark will head a studio focused on role-playing games or RPGs. → Read More
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