SAN JOSE, Calif. - Facebook has grown into a Web medium that more than 350 million people use as an extension of their authentic selves, not their alter egos. Yet in recent months the world's biggest social networking site has been invaded by make-believe farmers, chefs and tropical fish collectors. You pretenders know who you are.
"It kind of just got me hooked," Melanie Earhart, a 46-year-old self-employed Los Gatos resident said of "FarmVille," the most popular game on Facebook with 69.3 million monthly users, on average, including 26.6 million who daily tend their virtual crops and maybe milk digital cows.
With Facebook and MySpace providing the wind beneath their wings, "FarmVille" maker Zynga leads a flock of online game startups that has soared as one of Silicon Valley's success stories during the recession, attracting hefty venture capital investments and generating strong revenue from ads and the sale of "virtual goods," even though most people play the games for free.
Devotees say they enjoy the casual aspect of games that become integrated into their multi-tasking online social life. The ease contrasts sharply with the deeper engagement of popular online role-playing destinations such as Second Life and World of Warcraft, as well as the graphically rich games favored by hard-core gamers on consoles such as PlayStation and Xbox.
In a telling shift of trends, Electronic Arts, the Redwood City, Calif.-based giant known for console games such as "Madden NFL," recently announced plans to terminate 1,500 employees even as it expanded online offerings by acquiring Playfish, a Zynga rival. The deal put Playfish's value as at least $300 million, and possibly $400 million, based on future performance.
Back-of-the-napkin estimates put the social gaming sector's value into the billions, largely because of its success in executing the so-called "freemium" revenue model. Most of the revenue is earned from ardent players like Earhart who are enticed to pay for enhancements such as more acreage to plow and plant.
Earhart, who says she's starting to "burn out" on "FarmVille," has also fallen hard for "Cafe World" and "Happy Aquarium," the second- and third-ranked games on Facebook. For her and many others, those feel-good games are a welcome alternative to the virtual mayhem that permeates many of the military, mobster and vampire titles that have been staples of the video game industry.
"It's like crack, I guess," said Chris Lion of San Jose, another "FarmVille" devotee. "It just sucks you in a little bit at a time."
Unlike actual farmers, "FarmVille" residents can build booming agribusinesses or opt to design lively, colorful properties without fear of drought, tornadoes or locusts. It's a "Pollyannish" place, Earhart explains, where untended crops may die but animals never do - and good Samaritan points can be earned for adopting a "lonely pink cow" or fertilizing a friend's crops.
Each game has a way to separate people from their money. A "Texas Hold 'Em" player, for example, could spend many hours trying to play his way up from the low-stakes table - or spend real money to match wits against rivals who have stacks' worth of virtual millions and, theoretically, take the game more seriously.
Typically, no more than 3 percent of online game players in the United States spend real money on virtual goods, with a fraction of those users providing the bulk of revenue, according to Zynga founder and CEO Mark Pincus. But he hopes to harvest a higher percentage over time.
One recent appeal on "FarmVille" was its "Sweet Seeds for Haiti" campaign, which Pincus said has raised $700,000 for two charities that serve the impoverished country. The 50-50 split means Zynga has earned $700,000 from the campaign as well.
Justin Smith, keeper of the blogs Inside Facebook and Inside Social Games, co-authored a market study that estimated that revenue from "virtual goods" would reach $1 billion this year - and up to $1.6 billion next year.
Apart from Zynga and Playfish, the top game makers on Facebook include CrowdStar, maker of "Happy Aquarium," and Serious Business, which makes "Sell Your Friends," a game that essentially turns Facebook personas into game pieces.
Playdom is the leader on MySpace, with Zynga also doing well. Two other well-funded startups, Slide and RockYou, branched into games after winning fans for other social networking applications. The social network hi5, meanwhile, is tailoring itself as a hub for gamers.
MySpace's younger demographic, it seems, still loves the mob, with Playdom's "Mobsters" and Zynga's "MafiaWars" ranked first and second in a recent report. A big part of the social game business might be called Copycat: Just about every startup offers its twist on popular themes. Zynga recently sued Playdom after it hired away employees who had access to what Pincus says is valuable intellectual property.
Not since "Scrabulous," the Scrabble knockoff that was shut down as lawsuits swirled, has an online game generated as much buzz as "FarmVille." The game's "growth exceeded our expectations," Pincus said. "But it hasn't exceeded our expectations for social games."
The most successful games, Pincus said, encourage social interaction, enable self-expression and help users feel that their investment of time is worthwhile. While male players are generally driven by building a booming agribusiness, Pincus said, female players are more likely to design colorful, vibrant, playful farms.
When not playing farmer, Lion is on the faculty support staff at Stanford University's Graduate School of Business. He proudly notes that, "as a matter of principle," he hasn't spent any real money on his fake farm, but acknowledges he is still under its spell.
There was that day Lion and a friend had made plans for an outing. "Then my friend said, 'Can we hold off for two hours? My artichokes are coming due.' I didn't bat an eye: 'Oh sure, we can wait.' "
HOW SOCIAL GAMES WORK:
Thousands of game applications tailored to Facebook, MySpace, hi5 and other social networks have been created by techies around the world.
The most popular of these games - such as "FarmVille," "Happy Aquarium" and "Mobsters" - have grown through what Web business mavens call a "viral" appeal, encouraging players to invite friends into the games. Players might also opt to "share" game updates on their stream of news to friends.
To play, a Facebook user, for example, would click on the icon for a particular game, which opens a large window to the field of play. Devotees say the games offer a fun diversion that is easily integrated with their online social activities. Play is free - unless players opt to use real money for "virtual goods."
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