During my investigations tonight on Facebook games and applications, I came across a humanitarian effort by Zynga, the maker of some of the most popular and highest revenue generating Facebook games available today. Zynga’s business model, as I understand it is built on freemium principles. Players can participate in the game for free, but making significant progress in the game will either require an enormous investment in time or players can purchase premium points or items to accelerate their progress or customize their game experience in a way that is worth sharing with their friends. Thus, Zynga makes money by encouraging its users to give out collectively large sums of money in very small increments.
Zynga.org features a story of how this payment processing, social gaming platform is being used to raise money to build / fund schools and other recovery efforts following Haiti’s January 2010 earthquake. In an explanatory video, a Zynga employee boasts that Zynga was the first private company to donate over 1 million dollars to the Haiti relief effort. This money was raised by inviting game players to purchase limited edition, premium in-game products 100% of the proceeds for which would be directed towards efforts in Haiti. The approach is similar to the breast cancer fundraising efforts that visibly occur in retail stores annually in the US. Vendors market special “pink ribbon” editions of their products and consumers buy them with the expectation that some of the revenues from those products will fund breast cancer research. What I think is interesting about Zynga’s efforts is that 1) many if not most of these donations appear to be very small, yet they add up very quickly; 2) players get to advertise their charitable contributions through the same channel that they broadcast their game progress in; 3) the effort required to make a donation has been brought to almost zero by incorporating the fundraising into an existing payment platform.
