Not being very active in online gaming, I always sort of idly wondered how apps as bland and harmless as Farmville could pull off the sort of profits they achieved. I presumed there was some advertising, but it seemed unlikely that much data mining could be done from users who are (as far as I can tell) spend hours manipulating a virtual plot of land.

Well, it turns out that there were answers readily on hand: check out this article on Techcrunch. Apparently, it all comes back to something called a "lead gen scam" or "offer scam", where users are fooled into believing that they can get free virtual currency to level-up in their game, and in fact end up being charged exorbitant sums far higher than the cost of purchasing the level-up. As Michael Arrington points out, this is "an ecosystem [in] that it’s a self-reinforcing downward cycle. [...] Here’s the really insidious part: game developers who monetize the best (and that’s Zynga) make the most money and can spend the most on advertising. Those that won’t touch this stuff (Slide and others) fall further and further behind. [...] The games that scam the most, win."

Make sure to check out the bottom of the post, where Arrington highlights all the different responses and followups taken by several of the companies he names in the article. Also in the related posts is one outlining a possible class action suit against some of the violators.