[Quizzy]

Zynga's business model is like any other gaming publisher (such as EA, Blizzard, etc.). To succeed in gaming you MUST have a pipeline of games that continue revenue growth. If you cannot create your own, then you must acquire indie developers (OMGPOP recently). In time Zynga stock will be no different than any other gaming publisher stock. Look at Blizzard: other than Diablo, Starcraft and WoW, it has created nothing in the last 4 years beyond sequels. Homegrown innovation is nearly impossible.

Rovio was in the business for 5 years before Angry Birds, and I doubt they'll have another hit like Angry Birds ever again.

Id fell apart when it couldn't come up with something better than the Doom franchise.

OMGPOP was very smart to sell out to Zynga, because there is no way it would have come up with something even close to Draw Something in another 5 years.

Unlike rock stars and pop singers, creating a string of gaming hits is so much harder because it requires the perfect storm of so many variables each and every time, whereas a single person like Adele, Amy Winehouse, etc. can rely on their genius alone to create a hit.

[trimbo]

> Id fell apart when it couldn't come up with something better than the Doom franchise.

Except for, you know... Quake.

On your other point. The difference between Zynga and EA is that Zynga's games have a huge turnover rate and a very low percentage of paying customers. EA's games -- at least most of their games -- have 100% paying customers and have a large returning customer rate year after year (Madden 11, Madden 12, Madden 13, Fifa 11, Fifa 12...).

So in other words, Zynga's business model is completely different than EA's.

[bomatson]

I can appreciate this insight on Zynga, but I'd like to offer another perspective:

First off, have you seen the way Blizzard's stock performed during 2008? It was one of the few that continued to grow...

Rovio has more than just Angry Birds direct sales, it has a TON of merchandising opportunities with the characters (think Pixar). Plus they have a huge base of users that is excited to see what's next.

I'd also contend the rock stars analogy is backward - It is FAR more risky to assume a sole person can continue re-inventing themselves over a entire career. Granted, it's hard for game publishers, but at least there's a team and a more defined process for the innovation.