Why 400,000 players weren't enough to save Street Racing
Lovell goes through some back-of-the-envelope calculations to estimate just how much a game like Street Racing brings in from players, and how much it costs Zynga to maintain. At first glance, the inflows seem pretty healthy -- if even two percent of players are paying an average of $15 a month on the game, Zynga is bringing in a cool $1.5 million a year.
But one-and-a-half million dollars doesn't go as far as you'd think. To keep the game going, Zynga not only has to hire developers (which can easily eat up over $95,000 a pop annually) but also spend money on marketing, customer acquisition, servers and infrastructure. Lovell estimates these costs could easily exceed $1.5 million a year for a company like Zynga.
Even if a smaller game makes a small profit, though, Lovell argues that those resources might not be worth the opportunity cost to Zynga. After all, why sink millions of dollars into a tiny game like Street Racing when that money could help pump up games like Farmville and Frontierville -- games that easily bring in tens of millions of dollars every year.
In other words, sometimes you have to prune the social gaming weeds in order to afford fertilizer for the social gaming flowers. Or something.