Facing Zynga, CrowdStar Aims to Be the “Most Profitable” Social Gaming Company

CrowdStarA little-known Facebook social game developer, CrowdStar, has been blowing up on our leaderboards this past autumn, first with genre-defining virtual aquarium game Happy Aquarium, then with virtual pet-caring game Happy Pets. The company — or actually, two companies — is coming up as Zynga, the largest social game developer, has furthered its domination with Café World and Happy Aquarium competitor FishVille.

Zynga is going after every successful genre and developer — for example, its newest game, PetVille, is more like Playfish’s Pet Society than it is like Happy Pets. So the question is what CrowdStar is going to do to compete, seeing as is Zynga quickly and effectively creating games in the genre.

CrowdStar’s plan sounds difficult, but the company appears to be succeeding so far. “Every time they enter a category where we have gotten big,” chairman Peter Relan tells me, “we’ll launch an entirely new game within weeks.” He says to expect a new one this month.

The social gaming market is so “massive,” in Relan’s view, that there will be room for CrowdStar despite Zynga’s aggressive success. And, he says, the company will be doing it with a small team — it now has around 20 people, versus Zynga’s 600 — and hasn’t relied on Facebook advertising as much to help it grow. So, while Zynga is on track to make more than $200 million this year, from what we’ve heard, a lot of that revenue needs to go towards labor and advertising costs. CrowdStar has a very profitable model, and intends to keep it that way, according to Relan: “we want to be the most profitable social gaming company, not the one with the most revenue.”

peter_relanSo how is CrowdStar making money? Direct sales of virtual goods in its games, like other developers — although it has tried offers in the past and may use them again in the future. But that’s not its only type of revenue stream. CrowdStar is actually two companies, Relan also explains. Ireland-based CrowdStar International is a publishing company that, like traditional gaming companies, handles all the business operations. CrowdStar itself is the main studio. CSI, as one might abbreviate the international company, both handles some aspects of CrowdStar’s games, like direct payment vendor relationships, and cuts deals with third parties for things like toolbar promotion within CrowdStar games.

Meanwhile, CrowdStar, the San Francisco-based company, also has what Relan describes as a “skunk works,” CrowdStar Labs. This tiny group is charged with building and testing out new game ideas, with the most recent example being Restaurant Life, a virtual restaurant game with an interesting take on the genre (see our recent review, here).

CrowdStar may have seemed to appear overnight with the success of Happy Aquarium, but it actually is two years old. It built a battle role-playing game called World War II, a year ago. It monetized well, but didn’t grow very big. Then it built Know-It-All Trivia, a quiz game that got big but didn’t make a lot of money. It combined money and size with a test game last spring called Save the Reef, that relied heavily on virtual goods. It decided to go big with the fish theme, beginning work on Happy Aquarium in late July and launching it in early September.

While many developers have been concerned that Zynga is going to snuff out the competition, CrowdStar has proven the opposite. Look for it to play a much bigger role in the social gaming ecosystem in 2010.

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13 Responses to “Facing Zynga, CrowdStar Aims to Be the “Most Profitable” Social Gaming Company”

  1. Net Jacobsson says:

    The CrowdStar team is unbelievable. Suren, Jeff & Peter is a kick-ass trio.

  2. Sibblingz Introduces Cross-Platform Game Development Framework says:

    [...] in the form of Peter Relan — who is also an investor in and chairman of CrowdStar (which we covered in some detail yesterday). All three companies came out of his incubator, YouWeb. To dig deeper into the virtual goods [...]

  3. EVCin » Quick Hits: PetVille’s Massive Growth, Playfish Still Down Since EA Acquistion says:

    [...] day after CrowdStar threw down the gauntlet that it was going to be more profitable than Zynga, Zynga pulled out a massive Facebook advertising campaign (see example ad at right) that saw [...]

  4. Miura Haruhi says:

    this games is the best ever!!!love it…

  5. CrowdStar Launches Virtual Tourism Game Happy Island, Using Only Facebook Credits says:

    [...] CrowdStar recently promised to pump out original titles every month, pacing competitors — especially market leader Zynga. That developer followed up on Happy Aquarium and other aquarium games with FishVille in November, then followed up on Happy Pets (and preceding pet games, like Pet Society and SuperPoke Pets) with PetVille earlier this month. [...]

  6. Taking Stock of Facebook’s Top Social Game Developers in 2009 says:

    [...] so long, it is now clearly aiming to be a social gaming leader, with the intention to be the “most profitable” company by matching a small head-count with lots of successes. It now has 47.5 million MAU [...]

  7. Web 2.0 Ireland » Blog Archive » Gaming activity in Ireland growing up says:

    [...] one of the largest social gaming companies on Facebook, have an operation in Ireland (codename: CSI) , headed up by Gavin [...]

  8. Microsoft готовится купить Crowdstar? « socialplay.ru — S значит social says:

    [...] Crowdstar Питер Релан ранее утверждал, что стремится сделать компанию самой прибыльной в [...]

  9. Grace says:

    CrowdStar should develop more games in the further

  10. Barbara Nadur Herrera says:

    Hi, who can I get into contact about my happy island on facebook messing up?? Today I reached level 30, and everything went crazy… I lost 2 Diva shops1 @ 9800 = 19600, 1 putting green = 5600, 1 pyramid = 60000, 1 gemina market = 8800, 1 smal shrub = 475, 1 shrub cubed = 150, & tonight I bought something that was able to be put down on my island.. so I then bought 1 mercury rocket = 55 fb points that I paid from my credit card for… I am really mad, that you guys don’t have a contact place.. yea you may be better that the other company that has cafe world BUT, at least they have a contact number unlike you guys…. who is going to refund me my money??????? I am sooooo frustrated & dissapointed… no respect for me & my money or hard work… We are unable to put out shops down, so for that we loose but you guys dont.. that is not nice or fair! Please contact me I am begging you.. 954-647-8034.. If you can’t help me please let me know who to call .. thank you

  11. Microsoft готовится купить Crowdstar? « Igri-Info.Ru says:

    [...] Crowdstar Питер Релан ранее утверждал, что стремится сделать компанию самой прибыльной в [...]

  12. Darin Andrade says:

    Hi,my account was recently deactivated on facebook after I have invested hundreds of dollars in one of the crowdstar games, I had to create another account months ago because my real friends didnt like all the crowdstar game posts. Facebook just yesterday was on the news saying they were having problems with complaints about farmville posts on facebook accounts. Since it is facebooks problem why do I pay. Who do I sue to get my money back for the virtual items i bought. Facebook lets companies advertise with slogans like “most addicting game” money made there, and when we get addicted to a game money made there in facebook credit purchases. My account better get re-activated or there will be hell to pay. My poor 13 year old straight A student daughter is so worried she’s going to get deactivated and my wife is pissed off about all the money I spent.
    I expect a response today. Darin Andrade

  13. Microsoft Reportedly In Talks To Buy Social Games Maker CrowdStar — paidContent says:

    [...] focused on being profitable and this fall was making about $1 million a month in profits. In an interview with InsideFacebook earlier this year, CrowdStar Chairman Peter Relan said the company only had 20 employees (By [...]

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