[georgemcfly]

How is Zynga supposedly worth over 20 times what PopCap is being bought for? I must be massively underestimating how much people spend on in-game items in * Ville\* Wars. Or really overestimating how many copies of PvZ have been sold (I've bought it twice). And PopCap's revenue model isn't even almost wholly dependent on another companies success.

[kin]

Question: How old are you? I'm 23 and after entering the social gaming industry as a developer, the numbers are actually incredibly surprising. I'm talking like... several hundred thousand buckaroos a day from a single game, all from the same market of middle aged stay-at-home/desk-job women.

[endlessvoid94]

Yep, most people have no idea how much money is in this space right now. Real money. Coming from users.

It's enormous.

[bersekro88]

buckaroos? How much does that transfer over to USD?

[ericwan]

i believe it is 1 to 1

[newobj]

You are massively underestimating. Zynga did $500M revenue in 2010 and PopCap did $100M.

[InclinedPlane]

PopCap's games are extremely well known and particularly suited to mobile platforms like phones and tablets. If anything I'd say EA bought them for a steal, they are likely to earn back their buying price and more in only a few years.

[newobj]

Sounds like it's about a 10x revenue buyout. Seems right on the money.

[Impossible]

It's mostly hype surrounding anything social right now, especially with a good revenue model. Zynga is worth 4x what EA is and currently worth more than EA and Activision combined.

There is a lot of money in social games, but without getting a lot more users (hard when CityVille is hitting 100 million+) or getting much better conversion rates, Zynga is unlikely to see revenue from social games that matches their current value.

[alanfalcon]

That's how successful the Freemium/Facebook model has been, and describes perfectly where investors think the market is going.