Farmville treeconomics: is this going too far?
The farmville date tree. Fill a square with 16 of them and you have a great investment.
Fred Wilson blogged recently about Zynga, the #1 social gaming company, looking for talent in Wall Street. He should know, he’s a Managing Partner at Union Square Ventures, one of the VC firms backing the company. I am sure that to many this might seem strange but it shouldn’t. You can put an MBA to good use just to play Farmville.
Adam Nash did just that. He took Farmville economics a step further in his last two posts and Lisa Chan at Zynga took good note of it. The next task in his list is figuring out the economics of trees. I thought I would give it a try.
Like in any financial model we’ll start with a couple of assumptions:
- Investment period and residual value: like Adam said, people will not be playing Farmville in 2020. Given that the “investment cycle” is daily I thought it was fair to assume that the tree is sold for its residual value after 90 days.
- Discount rate: I’m a huge supporter of using the NPV investment rule. The problem with this is, like I said, that we have to now find an adequate discount rate. To simplify and given that Adam’s initial analysis was not done on a bang per buck basis, I’ll just do a comparison of investments.
- Available investments: I still need to level up! Also other trees are available as gifts but cannot be purchased. I’ll base the analysis on the trees I have available to purchase.
First we’ll compare the trees among themselves to see which one has the highest daily revenue:
| 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 |
The date tree is the winner, but if we were to rank it on a daily revenue per dolar spent basis (bang per buck) it would look quite different:
| Cost | Revenue/Harvest | Days to Harvest | Daily Revenue | Daily Rev/ Invested $ | Days to Payback | ||
| Cherry | $225.0 | $18.0 | 2 | $9.00 | 4.00% | 25 | |
| Fig | $350.0 | $33.0 | 3 | $11.00 | 3.14% | 32 | |
| Lemon | $475.0 | $41.0 | 3 | $13.67 | 2.88% | 35 | |
| Date | $800.0 | $69.0 | 3 | $23.00 | 2.88% | 35 | |
| Apple | $325.0 | $28.0 | 3 | $9.33 | 2.87% | 35 | |
| Plum | $350.0 | $30.0 | 3 | $10.00 | 2.86% | 35 | |
| Orange | $425.0 | $40.0 | 4 | $10.00 | 2.35% | 43 | |
| Peach | $500.0 | $47.0 | 4 | $11.75 | 2.35% | 43 | |
| Lime | $750.0 | $75.0 | 5 | $15.00 | 2.00% | 50 |
As a side note, also the crops would look different on a bang per buck basis:
| Daily Investment | Daily Profit | Daily Rev/ Invested $ | |
| Super Berries | 300.0 | 900 | 300.0% |
| Watermelon | 36.3 | 51 | 140.0% |
| Artichokes | 21.3 | 30 | 140.0% |
| Wheat | 16.7 | 22 | 130.0% |
| Cotton | 30.0 | 39 | 130.0% |
| Pineapples | 55.0 | 66 | 120.0% |
| Yellow Bell | 45.0 | 54 | 120.0% |
| Squash | 27.5 | 33 | 120.0% |
| Eggplant | 20.0 | 24 | 120.0% |
| Soybean | 30.0 | 33 | 110.0% |
| Pepper | 85.0 | 77 | 90.6% |
| Rice | 120.0 | 72 | 60.0% |
| Pumpkin | 135.0 | 69 | 51.1% |
| Blueberries | 390.0 | 156 | 40.0% |
| Strawberries | 150.0 | 60 | 40.0% |
| Raspberry | 420.0 | 132 | 31.4% |
Back to our analysis. Let’s compare a 90 day investment in a square full of date trees with some crops. Believe it or not, 16 date trees can be squeezed in a square.
| 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 |
Does a date tree square make sense? Sure. The catch? A square full of date trees costs 12,800 coins, you need 35 days just to pay the investment back. If you are looking to optimize your farm on a per square basis it’s perfect. Given that space and not coins is the key constrain in Farmville, it does make sense. Also, the longer the investment period, the better it will look.
Is this over-analyzing and going too far? Maybe, but in a blog about digital media, gaming, VC and randomness, this post fits great. If you need financial modeling to Excel at these games (pun intended), you do need to look in Wall Street to manage them.
Update: you can now see the analysis for Farmville animals here.
| Super Berries | 300.0 | 900 | 300.0% |
| Watermelon | 36.3 | 51 | 140.0% |
| Artichokes | 21.3 | 30 | 140.0% |
| Wheat | 16.7 | 22 | 130.0% |
| Cotton | 30.0 | 39 | 130.0% |
| Pinneaples | 55.0 | 66 | 120.0% |
| Yellow Bell | 45.0 | 54 | 120.0% |
| Squash | 27.5 | 33 | 120.0% |
| Eggplant | 20.0 | 24 | 120.0% |
| Soybean | 30.0 | 33 | 110.0% |
| Pepper | 85.0 | 77 | 90.6% |
| Rice | 120.0 | 72 | 60.0% |
| Pumpkin | 135.0 | 69 | 51.1% |
| Blueberries | 390.0 | 156 | 40.0% |
| Strawberries | 150.0 | 60 | 40.0% |
| Raspberry | 420.0 | 132 | 31.4% |
hola a todos un saludo de juan regalarme cosas
I DONT SEE THE RELEVANCE AS TREES ARE ACQUIRED AS GIFTS. NO ONE PURCHASES THEM.
[...] blog for example; Panaguia has written two posts in a row breaking down the economics of planting different trees and raising various animals on [...]
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Human creativity and aggregate economic behavior is illustrated by Farmville players. I play because my wife asked me to be her neighbor. Later she questioned my reasoning on running my virtual farm the I did. I told her I “churn the dirt” to earn XPs and coins. Others I know like to “decorate” their farms with villas and park benches, which to my mind only produces costs, not revenues. Even in a game the un-seen hand can be observed.
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I tried it and I can say that it does work, so thought might be helpful for you too.
Konstantin Meladze writes all songs for “Viagra”, Valery Meladze? and Sofia Rotaru.
Although i like the analisis of games as well, it strikes me as odd to utilize the NPV method.
To me i would rather be more promising to go for factors time and space. Many Bloggers did that. The next step i’d take would be the individuals preferences.
Like risk seeking and risk averse behaviour in finance it seems logical to assume mainly time preferences, not considering any esthetic preferences. (The only preference my girlfriend would have
)
So my tables would come down to:
Bucks per timeunit (normal) and
Bucks per klick
Now considering that trees only give XP one time you have to consider as well the xp factor. Tables will be needed for this as well. Without an asessment you won’t be able to determine a good strategy.
(General strategy can be leveling or amassing money that further complicates a easy suggestion on tactics.)
Now considering the huge initial investment that trees have and therefore there relativly long amortization period, they absolutly kill your XP per timeunit ratio.
So now that i have to decide to go with at least some crops my daytime preferences kick in. Unbelievable as it is i am sleeping a good deal of my lifetime. So over night it will be a healthy 8 hours plus crop. Most people work, so there will be at least another 8 hours plus crop and only the rest of the time you can spend on going to more promising crop types so they exist.
I miss duration grouped bucks per timeunit tables as they should be interesting. But that problem is not so severe as i can go through otherwise sorted lists.
Now having said that. The reason to go for trees only can be a bucks per click ratio and the freedom of trees not withering.
And thats exactly the reason i am planting trees.
- I want to have an long term investment that brings me bankable cash.
- I want to lower my clicking need
- I want to raise the freefuel per cropspace ratio
But i would never go for trees only as the game for me inherits leveling as well.
Hopefully thats not to much text, but i should’ve covered some aspects that might me important when it comes down to evaluation of benefits.
(Now being at the end, i have to add, not only is the clicking a constraint, but also time needed for action as you would have to consider loading times and execution times. Bucks per onlinetime could be a great measure if you go into details.
)
Last but not least, english is not my motherlanguage so forgive me i used some of the word i a way they are usally not utilized.