Always A Gamble: Zynga's Casual Peril

Happenings are afoot in the realm of casual gaming. Zynga, the leading casual gaming company, has seen its share price dropping. Not only that, but it has announced its intention to enter the tricky world of real-world money gambling. Things are, quite clearly, not working out as intended. And yet free-to-play casual gaming was supposed to be the most important thing to have happened in gaming since home consoles.

So what's going on?

It's important to me to front load this story with a sort of disclaimer, which is to say that I have nothing against the "casual" gaming frontier in general. For the most part these companies don't interest me, because they by and large produce boring games. Further, I have nothing against people making these games, although there are cases where their creativity seems in question. For the most part, though, I am of the opinion that people can make, and play, whatever they like. If you are someone unlucky enough to be hooked into an depth-free casual game, well, that's your choice.

What has antagonised me, however, has been the wave of people who've argued that casual games are in some way the "future" of gaming in general. For a while there it was argued not simply that this was the next big thing, but that it was going to define the future direct of gaming as a whole. Of course it's hasn't. It's as ridiculous as saying all gaming in the future will be mobile. Casual games are simply another aspect of a much large field. They are a diversification of the form. Evolution into another niche. People have a tendency to argue that a single trend is an overwhelming current, when it's not. The reason for this not really being the future of gaming is obvious, and implicit in the name: Casual. This is gaming for people who aren't obsessed, who don't have time, and who perhaps don't take it all that seriously. The reason why games have made so much money in the past is because people haven't been "casual" about them. Quite the opposite. It should come as little surprise, then, that people are now talking about the casual games bubble having "burst", in response to a plunge in the share price at Zynga.

What has happened is that Zynga have illustrated that boring, shallow games are not actually worth much. And it's very difficult to make money from something that no one wants to pay for.

What's happened recently is this: Zynga, who dominate casual or "social" gaming, largely via Facebook, was made public a year ago, and since then its shares have not done as some might have hoped. Yesterday their value dropped 40% in response to the news that the company had changed its outlook for financial performance in the coming year. Zynga made a $22.9 million loss in the last quarter, which, while by no means fatal, doesn't look good for the star of this kind of gaming. Zynga have been quick to blame changes made by host Facebook for the downturn, with COO John Schappert said saying: "Facebook made a number of changes in the quarter. These changes favoured new games. Our users did not remain as engaged and did not come back as often."

I suspect there are other reasons why they didn't come back, too. Like exhaustion. Like being introduced to gaming for the first time, and discovering it to be shiny and comprehensible at first, and then later vacuous. Novelties taking little time to become contemptible via over-familiarity.

I just hope Farmville proved to be a gateway drug for a few new gamers to make it to Minecraft and Guild Wars.

For developers, though, it was a gold rush. It happens again and again. No one is, or should be, surprised. Once the gold rush is over, the flood of newcomers dies down, and a more steady colonisation begins. This sort of gaming is not going anywhere, because it attracts (even if it fails to sustain) large numbers of people. But nevertheless the people who bet the farm on its ongoing growth and success were always going to be disappointed. This NYT article cuts to the heart of the issue by quoting analyst Michael Gartenberg of market-explainers Gartner: “Zynga’s challenge has been to drive up efforts to keep their attention and broaden their user base — which they did — but now they need to get them to pay,” he said. “Increasing the number of players doesn’t mean you’re making money off them. At the end of the day, though, virtual goods might not be a viable business strategy. People eventually stop spending money in virtual goods and want to spend that money on real goods.”

Or, indeed, on real games.

The reason why Zynga's model was never the future of gaming, and never a threat in any real sense to the hobbies we enjoy, was that we want to pay for depth. And not even, necessarily, gameplay depth, but depth of experience. We want to pay for games that do interesting things, and do them well, but we also want to pay for experiences we'll remember fondly. The true, significant, long-term value in games is not in their being easy, or distracting, or accessible, or social, or anything else that the casual market identified as important. It has to do with them being interesting, memorable, and valuable experiences for individuals. I have vital memories of playing Half-Life. It defined my imagination, even my career-trajectory. And I'll pay more than no dollars for more of that.

Sure, some big name developers rushed off to the frontier to pan for gold. Perhaps some of them found it. But - as Zynga's share price and eye on gambling so brutally illustrates - the future of gaming is in something far more committed. Something far less "casual".

Facebook could be an amazing platform for a game. There is nothing stopping that. There are even games worth playing, as we occasionally point out. But, ultimately, you'd think that a large, well-resourced company like Zynga might be able to create something essential. But they haven't.

When they do, I'll remember to log in.