Letters from Silicon Valley - Week 4: The Invisible $1Bn Industry

With my body still recoiling from the sleep deprivation obtained during the recent product launch I feel the need to divulge more about the industry Heyzap has entered. It's worth $1Bn and no-one has noticed it exists. Well, to be honest, when I say no-one, everyone in the Valley is talking about it but I never appreciated its potential until I arrived.

I'm referring to Social Games, those procrastination tools on facebook such as Farmville and Mafia Wars. Behind these innocent looking distractions lurks an industry worth $650M in 2009.

However, the truly remarkable aspect of this industry is its sheer growth, with revenues looking to hit over $1Bn in 2010. The shining light in this field is Zynga, makers of Farmville and Texas HoldEm Poker. It was only founded in 2007 but has already reached predicted revenues of $480M for 2010, in addition to a potential $3Bn valuation. Although this may sound like a rather steep estimate the true value can't be too far off, mainly due to an impressive expansion from 10M to 230M players in a mere 10 months!

So, the next time you buy a virtual tractor just remember the sheer revenue potential of 230M people doing the same thing.