Online gaming on social networking portals has today grown into a multi-million dollar industry. But while on one hand, international players are making ‘real’ money by selling ‘virtual’ goods, the Indian players are yet to show credible competence in capturing real value from online cash cows; B&E’s Pawan Chabra reports
In their Nobel Prize winning ‘Prospect Theory’, Daniel Kahneman and Amos Tversky, proved how consumers ‘subjectively’ frame the outcome of a certain transaction in their mind, thus affecting the perceived utility from the purchase. And who cares if the consideration is being laid out for ‘absolutely nothing’? At present, there are armies of online users (netizens) who are willingly giving in to the itch for winning on speculative online gaming. So considering that it is a fair deal for the consumers, what’s in it for the sellers not to cash-in on?
Virtual world is what the netizen freaks call it; real money is what online gaming companies like Zynga, Playfish, Mindjolt et al, tag it. Sure enough, it took these names no time to carve out a space for themselves on the social networking portals. Zynga, a company which was founded in 2007 by Mark Pincus (a Silicon Valley veteran) today, has offerings like FarmVille, Café World, Mafia Wars, Texas Hold’em Poker et al, which are the most popular games on the social networking websites. Be it on Facebook (the largest social network with 300 million users and growing at about a million users per week; going by the same rate, by December 31, 2010, the total user base witll touch around 365 million users!) or on the portal of its arch-rival Orkut or others like MySpace, Tagged, Twitter et al, Zynga is ruling the roost when it comes to developing games for social networks.
Pincus, who named the company after his deceased dog is eying huge revenues by selling virtual goods, rather than targeting the obvious online ads. So what are these virtual goods? It includes everything from a blue barn (priced at $5.40) and a garden gnome ($2.40) on Farmville to poker chips which can ‘never’ be encashed by the players ($5 for 75,000 and $50 for 5 million). With a daily user base of 50 million, industry watchers expect the company to become a hot property after it goes public (it expects to do that by next year).
Another not so old start-up, Mindjolt, has been able to attract decent traffic volume for its gaming applications, offering a host of addictive games to users. In fact, these offerings, by both the companies, are equally popular in the Indian sub-continent as it is in the core-targeted western markets.
In their Nobel Prize winning ‘Prospect Theory’, Daniel Kahneman and Amos Tversky, proved how consumers ‘subjectively’ frame the outcome of a certain transaction in their mind, thus affecting the perceived utility from the purchase. And who cares if the consideration is being laid out for ‘absolutely nothing’? At present, there are armies of online users (netizens) who are willingly giving in to the itch for winning on speculative online gaming. So considering that it is a fair deal for the consumers, what’s in it for the sellers not to cash-in on?
Virtual world is what the netizen freaks call it; real money is what online gaming companies like Zynga, Playfish, Mindjolt et al, tag it. Sure enough, it took these names no time to carve out a space for themselves on the social networking portals. Zynga, a company which was founded in 2007 by Mark Pincus (a Silicon Valley veteran) today, has offerings like FarmVille, Café World, Mafia Wars, Texas Hold’em Poker et al, which are the most popular games on the social networking websites. Be it on Facebook (the largest social network with 300 million users and growing at about a million users per week; going by the same rate, by December 31, 2010, the total user base witll touch around 365 million users!) or on the portal of its arch-rival Orkut or others like MySpace, Tagged, Twitter et al, Zynga is ruling the roost when it comes to developing games for social networks.
Pincus, who named the company after his deceased dog is eying huge revenues by selling virtual goods, rather than targeting the obvious online ads. So what are these virtual goods? It includes everything from a blue barn (priced at $5.40) and a garden gnome ($2.40) on Farmville to poker chips which can ‘never’ be encashed by the players ($5 for 75,000 and $50 for 5 million). With a daily user base of 50 million, industry watchers expect the company to become a hot property after it goes public (it expects to do that by next year).
Another not so old start-up, Mindjolt, has been able to attract decent traffic volume for its gaming applications, offering a host of addictive games to users. In fact, these offerings, by both the companies, are equally popular in the Indian sub-continent as it is in the core-targeted western markets.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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