One of the reoccurring themes in this blog is my skepticism of the unflinching dedication to the use of rake in order to monetize play within the real money gaming sector. First off, as I explained in this opinion piece on Inside Poker Business, I question whether the 3% to 5% rake range has been properly challenged within the context of online play in order for anyone to unequivocally claim that that is the optimal setting on the thumb-screw device known as rake. Secondly, the method on which rake is used to value players is off which I believe is a (finally) established fact. Thirdly, the type of the taxation systems where seeing in regulated markets ought to be pushing the industry towards exploring alternative revenue streams. Yet that riverbed remains dry.
To make my point I’ve turned to Zynga Poker at numerous occasions. And with some “new” numbers emerging from the social gaming company’s first live poker meet, “PokerCon”, I think it is relevant to do so again.
According to Zynga Poker, they serve 38,000,000 players each month. Their definition of “player” is a tad vague so I’m going to moderately interpret it as meaning 38,000,000 sessions.
The largest listed online real money online provider is Partygaming. They earn roughly $15,000,000 per month in rake revenues. To match that, Zynga Poker has to squeeze, on average, fourty cents out of each session. That’s equal to engaging in a couple of hands of 0.25/0.5 NL depending on how rake is distributed.
The cheapest official Zynga chips purchase I could find was $2.30 for $150,000 chips. So if every fifth Zynga session leads to a player going “broke” and reloading, I’m easily matching Partygaming in revenues. And this on a $2.30 reload. How much would the reload be if I came out on the bad end of the 0.25/0.50 NL engagement?
Remember, this comparion is based on a very moderate interpretation of Zynga’s own numbers. And it compares revenues, which is not the real money industry’s primary problem, instead of profitability which would favor Zynga for sure.
There are many factors, like the constant reloading of chips that Zynga Poker players receive for reaching targets and completing achievements, that skew this brute comparison, but it does put things into perspective. And if real money players in general display a lack of discipline towards bankroll management, I can only imagine the pace at which Zynga players move up in stake as the free chips rain down on them.
There are many aspects of Zynga Poker that are intriguing. And not all of them are for the better. But the value of the lesson they teach about how to monetize play should be easy enough to grasp.