How is it possible that Facebook gamesmaker Zynga will turn in 2009 revenues approaching a reported $250 million -- making 90% of its money selling gamers nothing but virtual goods?
The answer we've given before is that, like arcade games from the 1980s, Zynga's social games charge people small amounts of money to reduce friction in games they are addicted to.
But instead of paying another quarter for another life the way arcade gamers do, social gamers buy sub-machine guns in "Mafia Wars," and new farmland in "FarmVille" in order to level-up.
But while this answer is technically correct, it leaves us cold. Worse, this answer doesn't make much sense if you've never actually seen a Facebook game. It leaves us asking: Really?
So, in order to figure out how these social games actually work -- and make money -- we decided to suck it up and get addicted to one.
We picked FishVille, the latest hit from Zynga. It came out only in November, but already its monthly active users are up to 20 million people. It grew 4.68 million in the last week alone, according to Inside Social Games's AppData.
The object of FishVille is to build a magnificent virtual aquarium, full of spectacular fish and designer decorations. The way you do it is spending fake money to buy small fish for one price, and then, after tending to them for a few hours or days, selling them for more fake money then you paid. Then you use that money to buy more fish. If you want to speed your progress, you buy fake money with real money.
We'd explain more, but it's really just easier to show you how it works.