Virtual Products, Real Profits-华尔街日报

Zynga is transforming the game industry. Traditional videogame companies create games they think players will like, then sell them. Zynga offers free games through Facebook Inc.’s social network, then studies data on how its audience plays them. It uses its findings to fiddle with the games to get people to play longer, tell more Facebook friends about them and buy more ‘virtual goods.’ At the heart of the whole process is Zynga’s ability to analyze reams of data on how players are reacting to its games.

Over 95% of Zynga’s players never spend a nickel on its games. But its audience of 150 million unique monthly users is so large that the small percentage that buy $5 imaginary chickens in ‘FarmVille’ and $3 imaginary skyscrapers in ‘CityVille’ generate big bucks for the company. Some players spend hundreds or even thousands of dollars a month — they’re called ‘whales’ inside Zynga, the same term casinos use for high rollers.

via Virtual Products, Real Profits-华尔街日报.

This is a perfect example where marketing and marketing research is done together rather than sequentially.

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