Is Zynga Running Out of People to Acquire on the Facebook Platform?

I’m knee-deep in last minute preparation for this week’s Social Gaming Summit. It should be great and I hope you’ll be there to join us. I was spending some time on AppData and was struck by something – I thought it warranted a quick blog post of my own. I was also inspired by something I saw over at Gamezebo (hat tip to Joel):

No matter how you slice it, Zynga has to find a major growth channel off the Facebook platform if they are to continue their meteoric rise. It has nothing to do with Facebook Credits – you can fix economic problems. The real problem is growth. I did some quick and dirty nu

*Estimated Global Facebook Audience = 400 million people per month via Facebook’s press page

*Zynga Audience (non de-duplicated) according to AppData = 247 million people per month

Those are high level numbers. We need to make a few assumptions. In November 2009, Zynga had a blog post that said they had 200 million non de-duplicated people across the network 100 million on a de-duplicated basis. In other words, it’s a 2:1 ratio. Let’s assume that ratio still holds today in rough terms.

We also need to make another assumption. Not every one of those 400 million people on Facebook are truly active or actually interact with applications at all. The truly casual user and the user who does not interact with applications don’t really count. Facebook’s own statistics suggest that 50% of people are active on a daily basis. I’m going to make a simplifying assumption that 70% of the Facebook audience is the addressable audience for Zynga – the 50% daily users clearly engage with Facebook enough to be acquired and there must be another chunk (I’ll put that chunk at 20%) who log in regularly but not daily.

So what does the new math suggest?

*Addressable audience on Facebook = 400 million * 70% = 280 million people
*Zynga audience = 247 million people * 50% = 124 million people

The good news is that Zynga has not yet reached 50% penetration. The bad news is that this simple model suggests that they’re at least getting close. If they want to grow, I think they’re wisely looking to things beyond the Facebook platform to spur that growth.

Feel free to leave thoughts in the comments below. And challenge the math if you see fit to do so. And if you like this stuff, follow me on Twitter (@chudson).

  • Charles—I completely agree with you, though I may be a bit biased since Heyzap is solving Zynga's pain point: new user acquisition, by enabling game developers to get their FB/ social games distributed out to the rest of the web.

    With Facebook's recent changes, and the impending others, growth for applications, in general, will be stunted.

    There's really only two other places users are: the rest of the web (admittedly distributed across hundreds of thousands/ millions of websites) and mobile.

  • tadhgk

    Hi Charles,

    You're confusing monthly active users with regular users here. Zynga's daily active users (i.e. regular users) is actually around 20-25% of their monthly numbers. De-duped, that means they have around 20-25 million players (going on those November numbers, which haven't really grown since then for most developers, Zynga included).

    What happened (as I predicted in December in fact http://www.gamasutra.com/blogs/TadhgKelly/20091…) is that the various social developers had become very reliant on short term attention spam tactics to acquire lots of users very quickly, and Facebook killed off that pipe. At the same time, the rate of growth of Facebook users has slowed down, resulting in more “veteran” users (who've been through at least one game and got bored of it and less “novices”. This combination has effectively ended the cheap-and-cheerful phase of social game development and is creating a lot of interesting risky behaviours (such as cross-wall posting, which I'm pretty sure is against the terms of service, or abuse of the email facility). I expect there will be a further set of smackdowns handed around soon.

    What it means in general is that the social app economy is having to move away, inch by inch from the fake-viral place that it has existed in for a while (a lot of app developers talk about Facebook as “viral” when what they actually meant was “free advertising channels”), and into the realm of true-viral (where users start sharing games in their feeds off their own volition because they are genuinely awesome). That requires a completely different kind of software company, one which none of the social developers can really lay claim to at the moment.

  • Hi Tadhg,

    I remember reading your post. I would like to respond to something you said. I agree that DAUs are a better proxy for “active” users than MAU. So let's look at the DAU numbers as well. According to AppData, Zynga has around 62 million DAUs as of today. Assuming de-duping, we're looking at 25-30 million people, maybe a tad more than you suggested. But overall I agree with you that DAUs are a better proxy for engagement. But when you're thinking about the overall market opportunity, I'd argue that reach is a leading indicator of engagement – if you've reached nearly 50% of the audience and about 20% of the audience you've reached becomes truly engaged (124 million monthlies / 25 million dailies), I see no reason to believe that those you have not reached are more likely to engage. So you and I are just arguing over the right way to think about sizing the real opportunity and what should be measured when thinking about growth.

    I also agree with you that social games developers have pushed the boundaries in terms of using the distribution channels that Facebook has made available – that's why a lot of those channels have been taken away. No social app developers I know haven't argued that that big draw of Facebook is a huge market + low-cost (or even free) distribution.

    We live in exciting times. I really enjoy reading the Gamasutra take on social games – you guys come at it from a different angle and that's key to keeping everyone honest and helping move the debate forward. Keep up the good work!

    I agree with you

  • Because of life rhythm accelerated and working pressure increased so that people to pursue a relaxed, carefree mood in the spare time.They won’t suffer trend while seeking a comfortable, natural new packing. Just introduce some websites for you about natural new packing.you can go and see. hip hop clothes

  • technologiez

    that’s a bit mean for the people who arent old enough to PAY for farmville but like it don’t you think?

    i’m old enough and i’m not against paying for games i enjoy either, but Zynga do to many nice things for cash only customers and screw the free ones. It would be better if they just made everything so it can be bought with either cash or fake currency….but not so it costs like 100000gold for something that costs 12cash like in cafe world, that **** sucks
    http://technologiez.net/2010/07/25/zynga-the-go

  • Anonymous

    thatu2019s a bit mean for the people who arent old enough to PAY for farmville but like it donu2019t you think?nn-nniu2019m old enough and iu2019m not against paying for games i enjoy either, but Zynga do to many nice things for cash only customers and screw the free ones. It would be better if they just made everything so it can be bought with either cash or fake currencyu2026.but not so it costs like 100000gold for something that costs 12cash like in cafe world, that **** sucksnhttp://technologiez.net/2010/07/25/zynga-the-google-of-games/

  • i prefer to use hotspot shield by i think u dun hv the rights to install a softvare on ur skoool pc so u must us http proxies manually………….. viprasys.org open this site and in the http proxy section take one http proxy and add this proxy to ur firefox and u hv don open any site vvithout any restriction……..