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Is Social Gaming Just A Scam?

Michael Arrington's opening salvo against scammy monetization schemes by social gaming companies is going to be a big story. When the founder of Hot or Not calls your business unethical, you have the beginnings of a real scandal.

My gut reaction is that this has to be self-defeating in even the medium run - it's hard to measure hits to user goodwill at the margin, but there's a Wile E Coyote point where all of a sudden that goodwill is gone and you can't get it back. Brands with a bad reputation usually die rather than try to rehabilitate. Just think about Firestone tires, Phillip-Morris, or ValueJet. Those companies are still operating under different names today, but I'm not sure if a media company has enough tangible assets to survive the death of its main brand(s).

But look, there's real value in there. People want to play social games. And as long as you're creating real value, there's a way for you to capture at least some of it. The guys who run Zynga aren't stupid, and you can bet all these ads will disappear in an instant if users start to raise a fuss.

Full post as published by T Sinister on November 01, 2009 (boomark / email).