In the past week, Zynga has closed down Ponzi Inc. and now Roller Coaster Kingdom. Kyle Orland has written an interesting article for pondering the implications of the closure of such games and what it means for social games.

The first point he makes the standards for what makes a profitable game on Facebook have skyrocketed, at least for companies like Zynga. Roller Coaster Kingdom and Ponzi have 1.2 million and 221,000 players, respectively. Those are not FarmVille numbers but they are way more than the majority of games launched on Facebook this year.

If Zynga, with 1000+ employees, can’t make those numbers work, what’s the hope for the average social game developer. Either Zynga’s overhead is way too high (what have those 1000+ employees been working on lately?) or the economics behind social games have changed so that you need extremely high scale to be profitable.

His second and more interesting point is about the legal and ethical issues around closing a Facebook game with little notice. People invest time and accumulate virtual items of value in games. If you just shut down a game, that property disappears. The EULA, as Kyle Orland points out, probably covers Zynga and companies like that when they shut down and say your Ponzi points now count for some other random game. It’s bad customer relations though. One wonders how much it really costs to just run the games on cruise control and whether they should have just let the games die their natural course than cut the cord.

Regardless what’s in the End User License Agreements (“EULA”), there will be lawyers out there that will file a class action lawsuits is shutting down good but not growing social games unexpectedly becomes a trends in social games. Companies like Zynga have too much money to not be a target and the legalities behind EULA that can be changed without user’s consent are not as clear cut as lawyers may say they are. My guess is that they really have never been challenged in higher court in regards to the issues of virtual items and currency.

To read the full article on, go here.