on boundaries; do EA and zynga compete?

Cityville rapidly outranks Farmville creating a whirlwind of expectations. But the larger question that Games Beat raises, is whether or not Zynga now has more mojo than Electronic Arts. Of course this is only relevant if they compete for the same revenue or network effects.

The game also benefits from Zynga’s usual advertising on Facebook and its ability to cross-promote the game to its other Facebook users. The questions now are, will users will stick around and will they will spend money? Zynga’s games are free-to-play, where users can play for free and spend real money on virtual goods such as tractors in FarmVille.

Founded in 2007, Zynga has become one of the largest gaming companies, with more than 1,300 employees. Legendary investor John Doerr of Kleiner Perkins Caufield & Byers said Zynga was easily the best investment that his firm has ever made. The social networking game maker is already the largest app developer on Facebook. And some recent valuations show that Zynga is actually valued above $5 billion, larger than Electronic Arts, one of the largest video game publishers in the world.

Zynga is trying to build up its user numbers by expanding to new platforms such as mobile games in Japan. It is also expanding its social games to non-Facebook web sites and translating its games into other languages. The company has been buying about a company a month to get more talented game developers. But the No. 1 thing it has to do to keep growing is commission new games like CityVille.

via Merry Christmas, Zynga: CityVille eclipses FarmVille as the world’s biggest game | VentureBeat.

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