Farmville Economics: Risk Adjusted Crop Profitability

It’s clear that my addiction to spreadsheets and Farmville knows no bounds, so as predicted, here is my fifth post on the topic.


Here are the quick links to my first four posts:

The wizards at Zynga have been busy, and with regular updates every week (or even more frequently), a large number of new crops have been introduced.  As the comments on my other posts have become quite demanding, here are two of my original tables, updated for all the new crops (as of September 20, 2009):

Crop Profit / Day
Super Berries 900.00
Asparagus 183.00
Sugar Cane 177.00
Peas 176.00
Tomatoes 174.00
Green Tea 170.40
Grapes 170.00
Onion 166.00
Sunflowers 165.00
Coffee 162.00
Blackberries 162.00
Blueberries 156.00
Carrots 150.00
Raspberries 132.00
Broccoli 129.00
Cabbage 116.50
Red Wheat 84.67
Aloe Vera 80.00
Peppers 77.00
Yellow Mellon 77.00
Rice 72.00
Corn 71.67
Pumpkin 69.00
Pineapple 66.00
Potatoes 65.00
Strawberries 60.00
Yellow Bell 54.00
Watermelon 50.75
Cotton 39.00
Soybeans 33.00
Squash 33.00
Artichoke 29.75
Eggplant 24.00
Wheat 21.67

Assumptions: All numbers are normalized for one planting square per day, and assume a “perfect” farmer who can operate all 24 hours of a single day.  It’s assumed that you will need to harvest, plow, and plant every cycle for a given crop.

As it turns out, many times players are optimizing for experience per day, rather than for profit.  As a result, here is an updated table that shows experience per crop, with the same assumptions:

Crop XP / Day Cycle (Hours)
Super Berries 24.00 2.00
Strawberries 12.00 4.00
Raspberries 12.00 2.00
Blueberries 12.00 4.00
Blackberries 12.00 4.00
Aloe Vera 8.00 6.00
Pumpkin 6.00 8.00
Tomatoes 6.00 8.00
Sugar Cane 6.00 8.00
Green Tea 4.80 10.00
Asparagus 4.50 16.00
Rice 4.00 12.00
Carrots 4.00 12.00
Peas 4.00 24.00
Onions 4.00 12.00
Soybeans 3.00 24.00
Peppers 3.00 24.00
Grapes 3.00 24.00
Coffee 3.00 16.00
Sunflowers 3.00 24.00
Broccoli 2.50 48.00
Eggplant 1.50 48.00
Squash 1.50 48.00
Yellow Bell 1.50 48.00
Pineapple 1.50 48.00
Cabbage 1.50 48.00
Wheat 1.00 72.00
Cotton 1.00 72.00
Potatoes 1.00 72.00
Corn 1.00 72.00
Red Wheat 1.00 72.00
Artichoke 0.75 96.00
Watermelon 0.75 96.00
Yellow Mellon 0.75 96.00

It’s fairly obvious from the numbers above that crops that can be planted and harvested multiple times per day have a significant advantage. This advantage is largely due to the +1 XP you get from plowing a square, and the multiple turns per day. While the longer duration crops have higher experience, they don’t generate enough experience to match the multiple cycles of crops like the berries, or the 8-hour crops like Tomatoes.  Of course, this ignores the time value of money, the primary topic of my first blog post on Farmville Economics.

It seems as if Zynga has been doing their homework when building out their technology tree with additional crops.  Using my 15 coin / XP estimate, the table combining the value by coins and experience is dominated by the new crops:

Crop Profit + XP / Day
Super Berries 1260.00
Blackberries 342.00
Blueberries 336.00
Raspberries 312.00
Sugar Cane 267.00
Tomatoes 264.00
Asparagus 250.50
Green Tea 242.40
Strawberries 240.00
Peas 236.00
Onions 226.00
Grapes 215.00
Carrots 210.00
Coffee 207.00
Aloe Vera 200.00
Sunflowers 210.00
Broccoli 166.50
Pumpkin 159.00
Cabbage 139.00
Rice 132.00
Peppers 122.00
Red Wheat 99.67
Pineapple 88.50
Yellow Mellon 88.25
Corn 86.67
Potatoes 80.00
Soybeans 78.00
Yellow Bell 76.50
Watermelon 62.00
Squash 55.50
Cotton 54.00
Eggplant 46.50
Artichoke 41.00
Wheat 36.67

The title of this blog post, however, is Risk Adjusted Crop Profitability.  One of my orginal concerns was that measures of profitability were not properly taking into account the amount of risk that each crop incorporated.

When you plant a crop in Farmville, it grows for an allotted time.  During that time, you cannot harvest the crop, nor can you recover your capital.  It’s completely illiquid.  After that time period, you have an equivalent time period (100% of the growing time) to harvest the crop.  At that point, your investment is liquid and recoverable.  After the harvest time has expired, over the next equivalent time period (between 100% and 200% of the growing time), your crops will wither square-by-square, until none are left.

As a result, a crop that yields a few more coins of profit, but that involves an up-front investment of fifty coins, may not actually be worth the risk of withering.

In case you think I’m being melodramatic, it’s a very common problem.  People invest all of the wealth into planting crops, get distracted or misunderstand the rules, and then end up with withered crops and no money left over to re-plant.  They have to depend on “lotteries” and “helping neighbors” to recapitalize.  (In fact many don’t, which may be a problem Zynga needs to monitor.)

So how do we model risk-adjusted profitability?

In typical financial modeling, you would have a “cost of capital” – namely a borrowing rate that would be your cost of money over a period of time.  However, for this analysis, it didn’t seem appropriate – maybe I’ll revisit sometime in the future.

To model the Farmville risk, I tried to literally focus on the following facts:

  1. How much capital (coins) up front you risk by planting one square?
  2. What is the risk that you won’t be available during the harvest time?
  3. Probability of harvest + Probability of wither = 100%
  4. Multiply the profits per cycle with the probability of harvest
  5. Normalize to a risk-adjusted profit per day

In order to model #2, I’ve used the following assumption: you are expected to check Farmville once every 24 hours.  You can replace this with your own number, but given that Farmville has 15M+ active daily users, this assumption seems fair.

So, assuming any hour is the same as any other (on average), there is a 1/24 probability that you will be able to check Farmville in a given hour.  24 * 1/24 = 100%

I’m also assuming that your ability to check on a crop in any given hour is independent of the ability to check any other hour.  This keeps the probability calculations simple.

This means that for shorter lived crops, there is real default risk:

  • There is a 23/24 chance in any hour that you will not check on the crop.
  • This means, for a 4-hour crop, there is a 23^4/24^4 = 279841 / 331776 = 84.3% chance that you’ll miss checking on the crop during harvest time for full profit.
  • This means, for a 4-hour crop, there is an 84.3% chance you’ll miss the withering time, where you’ll receive partial profit.  (I’m assuming a linear decay rate)
  • This results in a default rate of 71.1% on a four-hour crop.

Using calculations similar to those above, I generated an expected profit per cycle.  I’ve regenerated the table (ignoring experience) for the crops, and ranked them by risk-adjusted profitability:

Crop Risk-Adjusted Profit / Day Risk of Complete Default
Peas 226.53 12.97%
Broccoli 217.37 1.68%
Grapes 206.37 12.97%
Sunflowers 201.57 12.97%
Asparagus 185.57 25.62%
Cabbage 181.47 1.68%
Super Berries 154.22 84.35%
Coffee 153.35 25.62%
Red Wheat 142.52 0.22%
Onions 135.58 36.01%
Yellow Mellon 130.15 0.03%
Green Tea 126.03 42.69%
Carrots 125.98 36.01%
Corn 123.93 0.22%
Peppers 117.11 12.97%
Sugar Cane 115.57 50.61%
Pineapple 115.54 1.68%
Potatoes 114.40 0.22%
Tomatoes 114.27 50.61%
Yellow Bell 99.87 1.68%
Watermelon 91.44 0.03%
Blackberries 80.30 71.14%
Rice 79.19 36.01%
Blueberries 78.89 71.14%
Cotton 77.22 0.22%
Soybeans 74.87 12.97%
Squash 72.46 1.68%
Pumpkin 68.82 50.61%
Aloe Vera 67.61 60.01%
Eggplant 60.71 1.68%
Artichoke 60.47 0.03%
Strawberries 56.35 71.14%
Wheat 52.43 0.22%
Raspberries 38.19 84.35%

Now, I’ve made quite a few simplifying assumptions here, so don’t confuse this with a PhD thesis in Farmville Economics. But it’s amazing to me how this list of crops, more than any other table, best reflects my own internal preferences on what to plant. Maybe that’s because the “once a day” estimate of average availability best fits my own time table during the week.

Another way of revising this estimate is to look at the “risk of complete default” as highly correlated with the “stress level” you feel when you plant a given crop.  Super Berries are awesome, but there is no question that when I plant them, I am hyper-aware of the need to check on them within a 2 hour window to harvest my profits.

Definitely an interesting lens on the topic of profitability.  Please feel free to share alternative views on how to evaluate the risk-adjusted profitability of Farmville crops here in the comments.

Update:  Here are additional posts on Farmville Economics, published after this one:

Farmville Economics: What Price Experience?

Despite the fact that some people find my recent preoccupation with Farmville amusing, the traffic to my original series of blog posts on the Personal Economics of Farmville has been extremely high.  This isn’t surprising given the incoming links from the Zynga Blog and the Wall Street Journal.


Here are the quick links to my first three posts:

Well everyone knows that bloggers can’t resist traffic, so as a result, I thought I’d add a fourth post to the series, highlighting some of the insights into the economic value of Farmville experience points.

It all started with the analysis I presented in the second post, which modified the profitability matrix for each Farmville crop by adding an economic value for Experience.  Here is a snippet:

The question is, how do you blend the value of experience and coins? The truth is, the function for valuing experience is probably too complicated to get right.

However, I did find a simplistic proxy.  1 experience point = 15 coins.

Why? Well, it turns out you can just sit there, plow a square for 15 coins, and get 1 experience point.  You can then delete the square and do it again.  So at least, in theory, you can “buy” an infinite supply of experience points for 15 coins each.

Boy, did that start a firestorm.  It turns out, there is a well-worn analysis that says that Farmville experience is actually worth 10 coins.  Why?  If you plow a square of land (-15 coins, +1 XP) and plant soybeans (-15 coins, +2 XP) and then delete, you spend a total of 30 coins, and you get +3 XP.  Thus 30/3 = 10 coins / XP.

It’s a more complicated series, and it ignores the liquidity issue of requiring the purchase of 3 XP at a time, not 1 XP, but it’s a pretty good proxy for the “cheapest” way to buy experience.

The more I thought about this, however, the more dissatisfied I became with the answer.  The reason?  It ignores the incredible time cost of those set of actions:

  • Click the plow tool.
  • Click the square.
  • Click the market tool
  • Navigate dialog, click soybeans.
  • Click the square
  • Click delete tool
  • Click the square
  • Select “Accept” from the “Are you sure” dialog

Ugh.  For 3XP.  Can you imagine trying to get 4500 XP this way?  I can’t.

As a result, I’m even going to invalidate my original 15 coin / XP assumption.  In fact, you’ll notice that for truly painless actions, like buying a building, the number of XP gained is typically 1/100 the price of the item.  For example, when you pay 250,000 coins for a log cabin, you also get 2500 XP.

I think this effectively bounds the range of the value of XP.  Clearly, it’s worth more than 1/100 of a coin, because you ALSO get the log cabin, which is a pretty snazzy farm improvement.  It’s also clearly more than 1/10, because the time cost of that process is clearly extracting value beyond the coins.

So, value of XP is:

0.01 coins < 1 XP < 0.1 coins

I’m guessing the value of XP is close to 20 coins.  A haybale is only 100 coins, and it gives you 5 XP.  Since a haybale is a pretty negligible improvement, you can assume that most of the price is actually for XP.  So, that would bound the range even tighter:

0.2 coins < 1 XP < 0.1 coins

Now, I know what you are going to say: “You can sell the haybale for 5 coins, making it even cheaper!”.  The problem there is that now you have to go through the delete process, with the confirmation dialog.  Ugh.   I’m trying to avoid that work.

In fact, my analysis is still missing a “cost” for the implicit clutter a haybale creates on your farm.  You have a limited amount of space, so the “price” of a haybale is really:

Cost of haybale = 100 coins + MIN((time cost to delete haybale – 5 coins), opportunity cost of lost 1/16 of a square of land)

Maybe in a future post I’ll explore the opportunity cost of clutter in more detail.  It’s certainly the thing that would prevent you from literally filling your field with haybales to buy experience.  (Interestingly, Farmville just rolled out an improvement today that lets you buy haybales continuously!)

Finally, I have to share a tip that was posted on one of my earlier articles that has represented the single largest improvement in my Farmville quality of life:

If you “fence in” your farmer, then Farmville will harvest, plow, seed a square immediately, without waiting for the farmer to walk to it.

I was skeptical of this advice at first, but I tried it this weekend, and it speeds planting a large farm by AT LEAST 50%.  I use ducks to “fence in my farmer”.  I keep several in a box at the edge of my farm, and first thing I do is walk the farmer into the box.  I then move one duck to close the trap, and boom, 15 minutes added back to my life.  🙂

Your mileage may vary.  Enjoy.

Update: I’ve posted the following new articles on Farmville Economics:

More Farmville Economics: Treeconomics

Wow.  The traffic from the first two blog posts on Farmville has been high.  In fact, the Zynga blog even picked up the two articles.  Very flattering.

I was all set to write a post tonight on the economics of trees in Farmville… but then I caught Pablo’s post on “Treeconomics”.

Brilliant.  Leveraging some of the work I had done, he does a evaluation of a 16-square of trees in terms of “yield” vs. crops.  Very interesting, confirming that a 16-square of Date trees can compare very favorably to almost everything. Before we continue diving into the games, lets come back out into the real world, trees are good for the environment, but if you really need to get them out of your way and plant them somewhere else, then click here to get the best prices on stump grinding from this company. Now back to business…

I’m going to have to think about this a bit more – I want to build a model where I incorporate a few additional factors:

  • The “down payment” for trees.
  • The freedom to never have to “plow” or “plant” again. (value of time)
  • The freedom from working capital for seeds on an ongoing basis.
  • The removal of “withering risk”.  Crops wither after 20% of their growing time, yielding a complete loss of the capital to plow & plant.  Trees never wither.
  • The lack of experience points from trees
  • Incorporate the data from all the trees, not just the ones you can buy.

I’ll still write a follow up here, but tonight there is no need.  Check out this table from Pablo as  sample:

Cost Revenue/Harvest Days to Harvest Daily Revenue Daily Rev/ Invested $ Days to Payback
Date $800.0 $69.0 3 $23.00 2.88% 35
Lime $750.0 $75.0 5 $15.00 2.00% 50
Lemon $475.0 $41.0 3 $13.67 2.88% 35
Peach $500.0 $47.0 4 $11.75 2.35% 43
Fig $350.0 $33.0 3 $11.00 3.14% 32
Plum $350.0 $30.0 3 $10.00 2.86% 35
Orange $425.0 $40.0 4 $10.00 2.35% 43
Apple $325.0 $28.0 3 $9.33 2.87% 35
Cherry $225.0 $18.0 2 $9.00 4.00% 25

And this one:

Daily Profit Total Profit Initial investment Residual Value Profit
Super Berries $900.0 $81,000.0 $81,000.0
Date tree square $368.0 $33,120.0 $12,800 $640.0 $20,960.0
Tomatoes $174.0 $15,660.0 $15,660.0
Raspberries $132.0 $11,880.0 $11,880.0

Too cool.

Now go read it.

Updates: I’ve now posted additional articles on Farmville Economics:

The Personal Economics of Farmville, Part 2

Yesterday, I wrote a fairly popular post about the personal economics of Farmville, the extremely popular Facebook game by Zynga.  There were enough comments and emails about the original post, I decided to write a quick follow-up to cover some of the most common ideas and concerns.


I was also able to get the data on Red Wheat and Yellow Mellon, which were missing from my original post.  Also, this weekend saw the (temporary?) advent of “Super Berries”.  I’ve updated my original table here, showing the rank of all Farmville crops based on net profit per day per square.  Let’s just say there is a reason Super Berries are, well, super:

Crop Profit / Day
Super Berries 900.00
Tomatoes 174.00
Sunflowers 165.00
Coffee 162.00
Blueberries 156.00
Carrots 150.00
Raspberries 132.00
Broccoli 129.00
Red Wheat 84.67
Yellow Mellon 77.00
Peppers 77.00
Rice 72.00
Corn 71.67
Pumpkin 69.00
Pineapple 66.00
Potatoes 65.00
Strawberries 60.00
Yellow Bell 54.00
Watermelon 50.75
Cotton 39.00
Soybeans 33.00
Squash 33.00
Artichoke 29.75
Eggplant 24.00
Wheat 21.67

The most interesting questions and comments came from Abhi Kumar, product manager for Farmville at Zynga.  Needless to say, it was extremely flattering to have Abhi interested in my post, and to hear his thoughts on the topic.

The first point Abhi raised was interesting.  The question was, how would I factor experience into these calculations.  Clearly, experience is crucial to the game in several regards:

  • It’s crucial for rising in the technology tree, to get access to new crops, tools, and other beneficial items.
  • It’s a basic game mechanic that drives people to see their “score” rise.
  • It’s public to your neighbors.  As a social game, this adds an additional game mechanic, similar to a leaderboard, that encourages you to boost your score.

In order to calculate the experience for each crop, I took the experience that each crop delivers per cycle, added one experience point per cycle for re-plowing, and then normalized the values for a single day (24 hours) and a single square.

Crop Experience / Day
Super Berries 24.00
Blueberries 12.00
Strawberries 12.00
Raspberries 12.00
Tomatoes 6.00
Pumpkin 6.00
Carrots 4.00
Rice 4.00
Peppers 3.00
Soybeans 3.00
Coffee 3.00
Broccoli 2.50
Sunflowers 2.00
Pineapple 1.50
Yellow Bell 1.50
Squash 1.50
Eggplant 1.50
Red Wheat 1.00
Corn 1.00
Potatoes 1.00
Cotton 1.00
Wheat 1.00
Yellow Mellon 0.75
Watermelon 0.75
Artichoke 0.75

Not surprisingly, the quick cycle-time of the berries dominates this table.

The question is, how do you blend the value of experience and coins? The truth is, the function for valuing experience is probably too complicated to get right.

However, I did find a simplistic proxy.  1 experience point = 15 coins.

Why? Well, it turns out you can just sit there, plow a square for 15 coins, and get 1 experience point.  You can then delete the square and do it again.  So at least, in theory, you can “buy” an infinite supply of experience points for 15 coins each.

When you include experience at this price, the rank of the crops changes significantly from the original “coins only” version of the most profitable crops:

Crop Profit + XP / Day
Super Berries 1260.00
Blueberries 336.00
Raspberries 312.00
Tomatoes 264.00
Strawberries 240.00
Carrots 210.00
Coffee 207.00
Sunflowers 195.00
Broccoli 166.50
Pumpkin 159.00
Rice 132.00
Peppers 122.00
Red Wheat 99.67
Pineapple 88.50
Yellow Mellon 88.25
Corn 86.67
Potatoes 80.00
Soybeans 78.00
Yellow Bell 76.50
Watermelon 62.00
Squash 55.50
Cotton 54.00
Eggplant 46.50
Artichoke 41.00
Wheat 36.67

In many ways, this final table is a more satisfying answer on what to plant, since it gives a fairly balanced view across coins (which are needed to buy seeds, tools, and other items) and experience (which is also needed to raise your level to buy seeds, tools, and other items).

Clearly, this analysis is very sensitive to the value of an experience point. The more value you ascribe to experience, the more the compound table begins to resemble the experience-only version.

As part of my original post, I had run some analysis that suggested that if you value the time that it requires to check on your crops, harvest them, and re-plow & plant, then you might get a different order.  I’ve now updated the chart to include the three crops that I didn’t have yesterday.


click to see the enlarged chart graphic

Based on the addition of the new crops, the top five crops in terms of their value in $ US / hour are:

  1. Yellow Mellon
  2. Broccoli
  3. Red Wheat
  4. Corn
  5. Watermelon

All of the values are still well below $1 / hour.

I re-ran these numbers utilizing the experience points.  While they did shift the numbers to the right, they didn’t alter the ranking significantly.  This is likely because the cost in time (15 minutes) for each cycle and the high conversion rate (1500 coins / $1 US) means that the time cost of checking dwarfs the incremental value of the experience per cycle.

That’s why you can see that one wacky line, Super Berries, which starts so high it’s off the chart, but crashes down under the weight of 12 cycle refreshes per day.

A couple people specifically wanted to see this analysis taking into account the new Tractor, which speeds plowing by up to 4x (although you need to buy fuel).  Since I don’t have a Tractor yet (working on it), I estimated what would happen if a cycle plow/plant took only 5 minutes instead of 15.  Here is the updated chart:

Farmville Economics Updated Tractor

click to see the enlarged chart graphic

For those of you playing at home, sorry to disappoint.  It turns out that dropping the time it takes does shift the value per hour out almost linearly.  You’ll note that in this chart, now the equivalent value for Yellow Mellon is over $2.62 / hour.  The order of the most valuable crops, however, does not change, because even five minutes dominates with such a high US $ to Farmville coin exchange rate.

Abhi did make one last point that I agree with completely.  The primary value of the game is not the coins you make.  (In fact, since you can’t really convert coins back to dollars, they are arguably worthless.)  The value is the fun and enjoyment you get from the time spent.

In fact, I could theorize that if you normally bill $50/hour for your time, the delta between your normal rate and the amount you are making with Farmville crops shows just how much you value playing Farmville.

Hope this post was as interesting to folks as the last.  I’ve got to go harvest some Super Berries…

Updates: I’ve now posted additional articles on Farmville Economics:

The Personal Economics of Farmville

I’ve been playing Farmville, a social video game by Zynga, over the past week, and I have to say that I’m extremely impressed.  It’s a very simple simulation game, with well integrated social aspects to promote virality, a good technology tree, and clever virtual goods integration.


If you’ve played the game (and at this point, approximately 9 million people have), then you are likely already familiar with the primary economics of the game.  As a farmer, you have a certain number of plots.  It costs money (coins) to plow a plot and plant seeds.  Different crops take different amounts of time to grow, and are worth different amounts at harvest.  Quite simply, the question is:

Which crops should you plant?

Since I do love an excuse to crack open Excel, I built a simple model that tells you what crops are the “most valuable” to plant.  My model was simple:

  • Revenue is just the value of the crop at harvest
  • Cost is the cost of the seeds + the cost to plow the square

In order to compare crops, I had to normalize the values:

  • Normalized all revenue and costs to “one square”
  • Normalized all revenue and costs to “one day”, namely 24 hours

Thus a crop like Strawberries, which takes 4 hours to grow, can be theoretically planted 6 times in a single day.  Eggplant, which takes 2 days to grow, can be planted 0.5 times in a single day.

This model gives you the following simple table as output, ranked by “coins per square per day”:

Crop Profit / Day
Tomatoes 174.00
Sunflowers 165.00
Coffee 162.00
Blueberries 156.00
Carrots 150.00
Raspberries 132.00
Broccoli 129.00
Peppers 77.00
Rice 72.00
Corn 71.67
Pumpkin 69.00
Pineapple 66.00
Potatoes 65.00
Strawberries 60.00
Yellow Bell 54.00
Watermelon 50.75
Cotton 39.00
Soybeans 33.00
Squash 33.00
Artichoke 29.75
Eggplant 24.00
Wheat 21.67

(Note: I still haven’t gotten the revenue and cycle time for the new crops, Red Wheat and Yellow Mellon)

Most of the strategy guides that I’ve found across the web have basically gone just this far.

The problem with this model, however, is pretty obvious:

It assumes that your time has no value!

Listen, Raspberries might be #6 on this list, but you have to actually harvest and replant 12 times per day! (It’s a two-hour crop).  That only seems reasonable if you truly value your time at $0.  Theoretically, we should give some non-zero value to the time it takes to replant, and see how it affects the rankings.

To do this, I changed the model based on the following assumptions:

  • It takes roughly 15 minutes to replant your farm with a crop
  • 1500 Farmville coins are worth $1 (which is what Zynga charges to buy coins with PayPal or your credit card).

I then graphed out the ranking of the crops on a spectrum from $0.00 / hour value for your time, all the way to $1.00 / hour.

As you can tell from the range, the bad news is that even the best crop flips to being “negative value” per day at a monetary value of approximately $0.70 / hour.


click the image to see enlarged verson

This graph paints a very different picture.  If you rank crops by what hourly wage “zeroes them out” in value, you find that actually, your top three crops should be:

  1. Broccoli ($0.69 / hour)
  2. Corn ($0.57 / hour)
  3. Watermelon ($0.54 / hour)

If you accept the idea that 1500 Farmville coins is worth $1 (which is a bit of a stretch since you can’t convert back to dollars…), then these are the crops that pay you the best “hourly wage” for your time.

There are a few things I’ve left out here:

  • Trees / Animals. I haven’t run these numbers for trees or animals, but it would be trivial to do so.
  • Working capital. These crops require different amounts of liquid cash in your Farmville account.  That capital theoretically has a cost, but I didn’t model it.
  • Experience. Some people are playing for experience points, not coins.  Ignored here.
  • Capital Risk. The different crops have different windows of time to harvest before your revenue goes to zero and your crops wither.  This analysis assumes a “perfect farmer”.

If you find this model interesting or useful, would love to see links back here from anyone who pursues any of these different issues. I first got the idea to do this from this article on, so I just wanted to give them a little credit.

Of course, that assumes that there is someone else out there twisted enough to spend time analyzing the personal economics of Farmville…

Updates: I’ve now posted several follow-on posts about Farmville Economics:

How Virtual Goods Caused the Market Crash of 2016

No, that’s not a typo.  I have seen the future.  And in the future, a burgeoning virtual goods economy that has been building over the past few years will lead to the next great financial bubble and crash.

Far-fetched?  Read on.

In some ways, virtual goods are almost as old as role-playing games.  Experience and special weapons are time consuming to earn, so a light grey market to “cheat” by purchasing equipment or characters has always existed.

This ecosystem exploded with popularity of massively multiplayer games, like World of Warcraft, and virtual worlds, like Second Life.  For the first time, cottage industries of real human beings sprang up to devote full time effort to investing time and resources into accumulating virtual wealth.

While typical Silicon Valley chit-chat turned to the impressive revenues that virtual goods firms began generating in 2008 & 2009, it wasn’t until Zynga IPO’ed in 2010 with eye-popping revenues of more than a quarter billion real dollars that the concept of virtual economies really became mainstream.  Major players from across the entertainment and technology domains raced to enter the market, and to leverage the powerful virality of social platforms combined with the fundamental addictiveness of gaming, reading a comprehensive buying guide every time you buy a gaming monitor is really important.  Add the final magic ingredient – pure monetary greed, and you had all the animal spirits needed to create the great virtual goods boom.

Unfortunately, as described in Devil Take the Hindmost, almost all great booms and busts are created through a combination of financial innovation in products that create leverage combined with a technology innovation that drives wildly optimistic views of future value.

Virtual goods and virtual economies had all the right elements to boom.  Initially, the conversion from real world stores of value into virtual stores was highly controlled.  Some of these economies allowed for the transfer of goods and virtual wealth, and some didn’t.  Quickly, however, competition forced a basic truth – people like obtaining virtual wealth in the form of virtual goods.   They like seeing that value multiply and grow.  More and more innovative services and economies were built, and increasingly they enabled mechanisms to convert those virtual stores of value into other virtual stores.  They also enabled players to compound their virtual wealth.  In fact, some even enabled the conversion back into real money.

Thus the vicious cycle was born.  Converting real money into virtual goods, and then taking advantage of the ability to compound that virtual value at unrealistic rates, set off a true boom.  The rate of return on virtual investments was so high compared to the anemic returns offered by the still moribund real economy, that early adopters looked like geniuses.  In 2014, the meme began to spread that everyone should have a portion of their portfolio allocated to “virtual assets”, which were not highly correlated to traditional stores of value.   Funds sprang up to allow the average individual without the time or inclination to invest and build virtual wealth to access the market.

The companies providing these ecosystems had no reason to dampen this enthusiasm.  Their systems, like those of investment bankers or market makers of yore, ensured a percentage of all transactions as revenues.   They made money as people converted real currency to virtual currency, and technically, as they converted it back.  Like central bankers with no fear of inflation, they juiced their economies to juice their own revenues.  Fortunately, the higher the internal rates of return in the virtual worlds, the less people were incented to take their virtual goods out and convert to real money.  Everyone effectively let their money ride, watching their virtual wealth grow.

By 2015, the notional value of virtual goods exceeded $1 Trillion for the first time.  Government bureaucrats began to explore the possibility of taxing these virtual economies to help cover increasing deficits.  Lobby groups sprang up to protect this “new economy” from destruction.  Pundits debated this nightly on all major cable networks.  People borrowed real money at relatively low rates in the real world to invest in virtual goods, because the returns were so much higher.  Real debt grew, savings dropped, but virtual assets grew faster.

Then, in 2016, one of the more flagrant virtual worlds began to see withdrawals rise.  Not significantly at first, but it turned out they had allowed virtual wealth of their members to grow high enough that people began to “retire”.  Everyone was in the game, so new entrants with smaller balances could match the asset loss.  Suddenly, the bear arguments, which had been discussed for years (beginning with a famous blog post from 2009) began to make more sense.

No one had the real money to cover these virtual “liabilities” the companies implicitly had to their members.  There was no virtual FDIC to cover accounts.  There was no regulation to ensure that these accounts would be paid.  The first “run” on a virtual economy had begun.

Suddenly, it became clear that these virtual economies were linked, even if owned by different giant companies.  People who lost money in one virtual economy, began pulling real money out of others.  One virtual world froze conversion, like a panicked 20th century third world nation.  Then the run really began.

Virtual asset values plummeted.  But the real debts did not.  Suddenly it turned out that more companies had their fingers in the virtual pie than most people thought.  Asset management firms.  Insurance firms.  Hedge funds.  Large banks.  Tech giants.

And that’s how virtual goods caused the market crash of 2016.

Do I believe that it will really happen?  No.  Do I believe that conceptually, virtual goods and economies could lead us into uncharted waters economically if we are not careful?  Yes.

I’ve read quite a bit in the past decade about the history of market bubbles and panics, and the patterns of each.  In every case, financial innovation creates some new way for people to assume liabilities in a highly leveraged way, outside of existing regulation or norms.  In combination, some technology offers the world hope of a much larger economic future.  Given the new found ability to invest heavily in that future, and radically different perceptions of that future, people invest, creating a virtuous cycle of high returns and increased investment that sucks almost all the air out of the system… and then keels over.

A fun mental exercise for a Thursday night.

Still I wonder. Since it’s only 2009, I feel like I don’t own enough stock in these companies.  It’s going to be quite a ride.  🙂

Spore: September 7th, 2008

Maxis has announced the launch date of the latest Will Wright masterpiece, Spore.

September 7, 2008.  They even have a quicktime movie just to announce it.

My previous blog post on Spore & Will Wright is here.  I got to play with the creature builder for a few seconds at Macworld 2008 in San Francisco.  It’s hard for me to comprehend how all-encompassing this game is going to be, or how long it may take to play through, let alone master.  It seems an awful lot like SimLife + SimCity + Civilization + Spaceward Ho! to me.

Mark your calendars.  I think it’s fair to say that US GDP may be impacted in Q3/Q4 2008 due to this launch.  Combined with Starcraft 2, we may indeed have a recession this year just from lost productivity.

SimCity Is Now Open Source as Micropolis

Very cool to see that the original SimCity code has been updated and released under the name Micropolis.

There is coverage on Boing Boing:

 SimCity has just been released as free software under the GPL version 3 license (though the name has been changed to Micropolis for trademark reasons; it was the original working title). This was precipitated by the inclusion of SimCity on the One Laptop Per Child XO machines, but no reason the kids should have all the fun. Can’t wait to see the SimCity hacks that emerge now:

The “MicropolisCore” project includes the latest Micropolis (SimCity) source code, cleaned up and recast into C++ classes, integrated into Python, using the wonderful SWIG interface generator tool. It also includes a Cairo based TileEngine, and a cellular automata machine CellEngine, which are independent but can be plugged together, so the tile engine can display cellular automata cells as well as SimCity tiles, or any other application’s tiles.

There is more detailed coverage about the open source release on this blog.

Back in college, I spent a good chunk of my junior year coding up a fast sprite library for the Mac called “Pixie” which had hand-tuned blitters, layering, and other goodies that seem shockingly dated now in a world of graphics cards, modern rendering pipelines, and modern gaming engines.  Back then, getting 30 frame-per-second animation for about fifty 32×32 animated sprites was considered real bragging rights for a 68K-based Mac.  I can’t tell you how excited back then I would have been to download and play with this.

Check it out, if you are so inclined.

Activision Blizzard: New Video Game Giant, More MBA’s per Square Inch?

Sorry, I don’t know how I missed this news for two days.

Activision, maker of the hit series Guitar Hero, is merging with Vivendi Universal Games, which owns Blizzard, maker of World of Warcraft.  Blizzard, as I’ve posted here previously, is in my opinion the best video game studio of the past decade, bar none.

According to this New York Times article, the combined gian will roughly match Electronic Arts in revenue and size:

The deal announced Sunday will essentially leave Electronic Arts neck-and-neck with the newly combined entity, called Activision Blizzard (named for the biggest studio at Vivendi Games, Blizzard Entertainment). Electronic Arts is projected to have around $3.7 billion in sales this year, while executives of the merging companies said Activision Blizzard should have around $3.8 billion.

Investors seemed to applaud the deal. Activision’s stock was up 20.7 percent for the week on Tuesday at $26.74. Vivendi said it would pay $1.7 billion, or $27.50 a share, and wind up with a 52 percent stake in Activision Blizzard.

The deal is a little worrisome to me, given the fact that Activision has had significant ups & downs in its history.  Blizzard, on the other hand, seems to bat 1000 year after year with every game they release.  (I am soooo looking forward to Starcraft 2 in 2008)

This part of the article gave me pause:

“Activision has more M.B.A.’s per square inch than anybody,” said Michael Pachter, an analyst with Wedbush Morgan Securities. He argued that Mr. Kotick had taken a disciplined approach to running Activision, almost in the spirit of a packaged goods company like Procter & Gamble. “They run the company like a business.”

Is that a good thing?  Really?  Call me a hypocrite (since I do, in fact, have an MBA), but something about this line gave me the shivers.  In fact, just re-reading it now gives me the shivers.

More MBA’s per square inch than anybody.

Ugh.  That cannot be a good thing for a video game company.  I’m not sure that’s good thing for any company outside an investment bank, private equity firm, or a management consulting firm.

It’s like I just felt their ability to recruit rock star engineers fall through the floor.  Can you imagine the pitch:

Recruiter:  “Come join our engineering team!  We have free drinks, video games, great benefits, stock options, and more MBA’s per square inch than anyone else!”

Engineer:  “That sounds… ew.  oh.  geez.  sorry.  You’re breaking up.  I’ll call you right back.”


Starcraft 2: Blizzard Website Updates

Quick post, but if you haven’t checked out the new Starcraft 2 website, you are missing out.   I’ve managed to successfully avoid getting roped into World of Warcraft, but I’m pretty sure this one has my number on it.  I’m not sure exactly how I’m going to find the couple hundred spare hours necessary for this one.  I think Blizzard may be the best video game company of all time.

Pixar:Computer Animation as Blizzard:Real Time Strategy Games


Blizzard Demos Starcraft 2 in Korea

When you play video games, you always remember the ones that absorbed huge blocks of time from your life. Starcraft was one of those games for me.

Well, it looks like the next great game from the company that brought us World of Warcraft will not be another Warcraft title or massively multiplayer game. Instead, they have taken the wraps off of a Starcraft sequel. The Starcraft 2 website is live!

For those of you who don’t play these types of games, Starcraft is a strategy game where you control armies of one of three species: Human, Zerg, or Protoss, and it’s a basic “mine, build & fight” kind of game. This one, however, was so well executed that it became the basis for professional competition in Korea, and a world-wide phenomenon.

The Blizzard games have inspired hundreds of copycat titles, but it’s an extremely hard problem to balance the design of the different races, units, resources, economics, technology and gameplay. In fact, it’s almost an impossible problem. Blizzard, however, does it better than anyone.

Here is a good write-up on the debut and press conference Q&A on GameSpot. Here is another one on Inside Mac Games.

Better yet… here is the CGI announcement trailer for the game, as debuted in Korea, on YouTube:

Here is a great video of the actual gameplay… notice again. Three key races (Terran, Zerg, Protoss) and a much better model of air/ground interaction.

Going back over 15 years, Blizzard has repeatedly demonstrated their ability to develop games that are outstanding in design and execution. What Pixar is to computer-animated film, Blizzard is to modern video games. As another hallmark of an exemplary shop, they deliver their titles for launch on both the Mac & PC simultaneously. You don’t see them complaining about time to market or cost. They know that a game of sufficient quality will pay for itself many times over, and with Blizzard’s track record, they always do.

I’m very excited to play this game, although I realize that in the modern era, I will be hopelessly outclassed by other players before I even get the DVD home and installed 🙂

Update (5/22/2007): Nate has a post on this as well, and he found more great YouTube videos of the gameplay presentation.  I felt like I was getting a 20 minute tutorial on Protoss unit deployment.  Colossus!

Nintendo Video Game History: For Sale on eBay This Week!

Yes, I am shamelessly plugging my own listings. Deal with it.

I actually have 13 new listings up this week, and I thought it would be fun to highlight them because most of them are ghosts of video game consoles past like the mythic dungeons in world of warcraft! If you don’t know what I’m talking about then you can’t miss visiting this and revive the old memories. Most were dug up by my father recently, who keeps discovering new things to sell in his endless supply of storage sheds.

This week, I have the following starting on Sunday at 5pm:

  • Nintendo 64, with Mario 64 & Rumble Pack
  • Lot of 10 Nintendo 64 Games
  • Super Nintendo, with two controllers (but no AC or Video Cable)
  • Original Nintendo, with Super Mario Bros.
  • … and other assorted goodies

Feel free to check out my new listings. And happy bidding! 🙂

A Kindred Spirit: Amy Jo Kim at USC on Game Mechanics

Many thanks to Will Hsu for his post today for pointing me in this direction.

Please check out this summary write-up on the O’Reilly site on the philosophy and theories of Amy Jo Kim, PhD, based on her discussion of Game Mechanics and Online Communities at ETech.

Kim discussed five key mechanics of game design, why they are important and powerful, and examined examples of how they can be used in other settings. The five game mechanics discussed were collecting things, earning points, providing feedback, exchanges, and customization.

Many of these mechanics speak to very primal response patterns inside the human psyche, which is why they can be so powerful. Another key point is that games are designed to be fun and engaging, and whenever you can make any system or appliation more fun you’ll likely improve the user experience and get them using the system more regularly and for longer times.

I can’t tell you how closely Kim’s assessment of how to build compelling engagement matches my own. In fact, some of her assessment of the mix of understanding of video games, behavioral finance, and online behavior vaguely mirrors my own concept and theme for this blog.

I’ve long believed that people have underestimated video games as a new medium not only for entertainment, but for engagement. Video games have often been on the forefront of experimental and exploratory attempts at bridging the gaps between new technology and human interaction. Audio, Color, 3D, economics, story telling… video games have managed to incorporate these elements in the human/technology interaction long before any other classes of technology products have.

Kim lines up five types of game mechanics in her talk that she directly traces to the success of online communities like MySpace:

  • Collecting
  • Points
  • Feedback
  • Exchanges
  • Customization

It’s worth the full read here. Sounds like eBay, doesn’t it?

I’ve read some great material from Susan Wu at Charles River Ventures, and Wil Wright, creator of The Sims and Spore. But Kim’s overview is squarely aggregates quite a few of the insights I’ve been working to rationalize over the years.

I’ve got to look into this more deeply, as this captures so many of the threads in human computer interaction that I’ve personally been most interested in since my days in computer science at Stanford.

Update (4/5/2007):  Amy Jo Kim has a blog… why not go direct to the source?

The Product Wars: Video Games & High Definition DVDs

Fun website I found today, as I was reading about the ongoing battles between HD-DVD and Blu-Ray DVD, the two competing high definition DVD formats on the market currently.

The website is called “The Product Wars”, and it basically just scrapes for data (not sure this is the best indicator vs. scraping eBay, but I digress…)

In any case, they have pages that show a lot of statistics about how well the competing systems are doing.  Here is the page for the DVD Wars.

Takeaway?  Blu-Ray is doing much better than expected, given the PS3 shortages and the cost advantage of HD-DVD players.  In fact, right now, it looks like Blu-Ray has the edge.

The website also has a page dedicated to the next-generation video consoles: Nintendo Wii, Playstation 3, and Xbox 360.

Takeaway?  The Xbox 360 is still outselling everything, although the Wii seems to have eclipsed the Xbox 360 in terms of popularity on a few key measures.

Fun data, if you are into those two markets.