Does today’s acquisition validate the model of social games monetizing through virtual goods?
This is the biggest validation this industry has had, and I can guarantee you this transaction would not have happened if there was not some sustainable value. But value is easily confused with maximum revenue in the short term. We want to create the most valuable IP over time. We want to create the Star Wars of social games, or whatever franchise you can think of. Lets face it, there’s only so many people on earth, and at some point you move out of hypergrowth and into how well you nurture your audience and take care of them. Every industry has cycles, and as we move there in social gaming, EA is a great fit for that. There have been a lot of people harshly criticizing the idea of virtual goods inside social games, as though players are buying nothing. Let’s take a step back. There has been a confusion between the marginal cost of production, $0, and the perceived value. Think about what you buy when you buy a movie ticket – you buy the right to experience some emotions. What do you “
