Empire Avenue is an Awesome Social Pyramid Scheme Game

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Awakening, Technology, World of Warcraft

Warning: this content is older than 365 days. It may be out of date and no longer relevant.

Updated: Jim Durbin pointed out that I was doing it wrong, so I’m taking some of his cues to bang it around more and see what I missed in-game the first time around. Expect an update in a week or two.

I’m a gamer, having played video games all my life, an avid World of Warcraft player, and much more, so when someone announces a social game that purportedly combines gaming and social networks, of course I’m going to take a peek. Such is the curious case of Empire Avenue, which is supposed to be a fantasy stock market, but for social media personalities as opposed to companies and commodities. So, what did I come up with in my first 24 hours playing?

Empire Avenue is possibly one of the best designed pyramid schemes I’ve seen.

First, it’s got the vanity/ego hook combined with a claim about social media metrics. Bam. Every social media monkey who obsesses over things like Klout score is in all the way, if only to have another number to attach to their names in lieu of actual accomplishments. That by itself is a guaranteed win, because ego hooks every time.

Now, in a regular video game, there are currency sources and sinks, or ways to obtain in-game currency and ways to spend it. In World of Warcraft, for example, you kill critters or demons or big bads for money, among other things, and you spend that money on gear and upgrades. There are no options for obtaining currency (within the Terms of Service) outside the game.

Look at the way Empire Avenue works. Every player starts out with 10,000 or so of the game’s currency. After your initial account creation, what are the sources and sinks of game money? More friends recruited (who bring their own starter cash), watching ads, or outright buying game currency. There aren’t any in-game sources of money after the starter cash except getting lucky on investments – so you either have to build up your own pyramid and downlines to feed your empire, or resort to out of game purchases or purchase equivalents. This builds in a network effect and a pyramid all at the same time – the more people you recruit, the more money potential you have in your downline, since the principal source of new cash in-game is recruiting.

Next, look at the game mechanics. Every transaction has a house cut of 5%, so if you buy and sell, say, Mack Collier, you’d better have made at least 10% on the deal or you’ve lost money. Think about that for a second. Other than buying it outright or with purchase equivalents, there is no source of in game cash other than recruiting new people, which means that once the service plateaus, the house will be bleeding away 5-10% on every single action in the game. Put another way, the economy will be consistently shrinking once the service plateaus and the infusions of new cash from referrals dries up. To keep playing, you will have to buy in or hope you get very lucky on your “investments” to beat the house.

Finally, look at how the system incentives work. Social media personalities show up and they provide immediate cash drains for the majority of the player base. You’re much more likely to “invest” in Chris Brogan than you are some guy you’ve never heard of, and people like Chris and I are likely too set up shop there but not do much else (we’re too busy), so we are effectively cash sinks that drain away resources from the bottom of the pyramid. What happens when the masses at the bottom of the pyramid burn through their starter cash and can’t beat the 10% house fee? That’s right – time to buy more game cash, either with real world cash or cash-equivalent actions (watching ads, downloading apps, etc.)

If you want to hear more about my review of Empire Avenue, be sure to tune into John Wall’s and my remarks on Thursday’s episode of Marketing Over Coffee.

I salute the Empire Avenue team for coming up with a very potent cocktail of social gaming, gambling, and strong financial incentives to make one heck of a pyramid game. It’s got all the right mechanics to make its creators a bucket of money at the expense of people who want to be known in social media for any reason at all or are desperate to chase after any new shiny object, which is a brilliant design.

None of this holds a candle, of course, to the real Wall Street, which has some amazing schemes in its own right. (Amazon affiliate link)

Should you play? That’s up to you. I’ve pretty much abandoned my account already, so I apologize in advance for being a massive cash sink in the in-game economy. Feel free to roll a Horde character in Warcraft and beat me up in Alterac Valley to get even. (for the Alliance, even if the Alliance on my server can’t PvP to save its life)

Comments

24 responses to “Empire Avenue is an Awesome Social Pyramid Scheme Game”

May 11, 2011

Nathan King

I signed up for Empire Avenue and quickly lost interest. No thanks!

Reply
May 11, 2011

Jim Durbin

Um – Chris the most significant source of eaves is dividends from your investments, which you haven’t been playing long enough to accrue in any fashion. Your social media activity leads to dividends (as do investments in other people and their social media activity), which gives you new eaves. In fact, recruiting new players can give you only 50,000 eaves, as you’re maxed out at 25 invites.

I know it’s fashionable to bash Empire Avenue for social media folks who think it’s just a stock game, but you just wrote an entire post without understanding the basics of the game.

Reply
1. May 11, 2011
  
  Christopher S. Penn
  
  Thanks for the update, Jim. I’ll check back on my account in a week to see what’s changed. Appreciate the feedback.
  
  Reply
  1. May 11, 2011
    
    Jim Durbin
    
    I currently make 46000 eaves a day from my investments and social activity. My wealth, on the other hand has been growing even faster because of the explosion of new players I buy, and who then rise quickly. Because the numbers of new players and new highly connected players is high right now, many of the people assume prices will always rise. It’s like the housing market in California in 2000-2006. Any strategy works, and so people feel good on the upswing. When the market corrects, that feel good moment is replaced by actual disappointment when your shares stop rising. Once the invites and achievements stop rewarding the player, social activity, stock buying, and dividends are the only way to grow (and 60% of the value is activity outside the game. The stats tab has advisors you can unlock to see how they track your progress and reach- it tracks more than just output). The game mechanics work, but it takes time for them to do so.
    
    For stock purchases, there’s another aspect. The money you receive from stock shares declines the more shares you have. That’s money that at first, goes to the player whose stock is bought (as much as 50%), and then declines to 10%. Buying stock in people with lots of shares removes 90% of the value to the player being bought, in addition to a 5% override for the buyer.
    
    The stock game is important as a random person generator, but those who stay for it are going to be as bored as high level players on Farmville, Pocket Frogs, Angry Birds. The stock game helps you find new people. Those who fail to use that to connect across other social platforms will get bored and leave. Those who do connect, will make new friends in fast moving countries like Brazil, the UK, and Malaysia, as well as connecting to people in their own backyard. Good luck, Chris.
    
    Reply
2. May 12, 2011
  
  William Pitcher
  
  Dividends are indeed a good source of cash, but you also receive half of the eaves that people spend on you to buy your shares. For beginners, this is the major source of income. True, the 50 percent figure declines when you reach high on the leaderboards, but that’s to compensate for the large dividends you are likely earning by that point.
  
  Many of the site’s top participants have never used one cent of real cash to buy game currency or upgrades. I have just to support the developers, but I never really needed it.
  
  Cheers, Bill.
  
  Reply
May 11, 2011

Justice Mitchell

Chris,

I think you’re missing the other level of this game as a valid communications media. It’s not simply rules and regulations, buy and selling. Frankly, I’m not in this game to “win” meeting a lot of genuinely sound business mind in-game. Consequently, boosting both my twitter and blog traffic within two weeks. There’s a larger underlying thread(s) that have some very respectable social professionals actively discussing subject external to game-play. I suppose the same could be said for an MMOG, but this is stepped knee deep within your industry so I find it interesting that you’ve taken this stance.

My best to you and your future endeavors.

Reply
May 11, 2011

Kneale Mann

But I thought it wasn’t about the numbers? 😉 I joined last week and already tired of the email updates. That reminds me, I should ask a question on Quora. Or, I could go meet another human and make some connections that way.

Reply
1. May 12, 2011
  
  Tom Ohle
  
  As a heads-up, you can adjust the notification settings on Empire Avenue :). As for “meet another human” — absolutely! That’s actually, no kidding, the whole point of Empire Avenue: meet new people.
  
  Reply
May 12, 2011

Tom Ohle

Hey Chris,

Thanks for taking the time to write up a post about Empire Avenue, but I fear you’ve missed the point of the site and – as has been alluded to in a comment below – the way to make virtual cash on Empire Avenue.

“After your initial account creation, what are the sources and sinks of game money? More friends recruited (who bring their own starter cash), watching ads, or outright buying game currency.”
You get no money at all for watching ads… we don’t even have ads you can watch. Yes, you can earn virtual currency by inviting friends, but there is a limit to how much you can earn in this way. Yes, you can buy virtual currency, but that is certainly not the main way to earn cash on Empire Avenue. The primary ways to make money on Empire Avenue are to be social on the site and on other networks — you earn daily dividends based on the activity and engagement of the people you’ve invested in, and you earn daily currency based on your own activity and engagement across the web, on the networks you’ve connected to Empire Avenue. And certainly, you earn an ample amount of virtual cash by getting others to invest in you — yes, we do take a “house cut” but the person being invested in gets the vast majority of the currency exchanged.

“This builds in a network effect and a pyramid all at the same time – the more people you recruit, the more money potential you have in your downline, since the principal source of new cash in-game is recruiting.”
As noted, not true at all.

“Next, look at the game mechanics. Every transaction has a house cut of 5%, so if you buy and sell, say, Mack Collier, you’d better have made at least 10% on the deal or you’ve lost money. Think about that for a second. Other than buying it outright or with purchase equivalents, there is no source of in game cash other than recruiting new people, which means that once the service plateaus, the house will be bleeding away 5-10% on every single action in the game. Put another way, the economy will be consistently shrinking once the service plateaus and the infusions of new cash from referrals dries up. To keep playing, you will have to buy in or hope you get very lucky on your “investments” to beat the house.”
The “house cut” is part of the effort to have a balanced economy, and there are other controls in place apart from this one (including the inability to generate infinite cash by simply recruiting more people or buying an infinite number of shares in someone). Inflation in the Empire Avenue economy has remained consistent, and nothing indicates that the site will shrink or that the economy could ever shrink. As before, the suggestion that referrals are the main source of income on the site is entirely untrue.

“You’re much more likely to “invest” in Chris Brogan than you are some guy you’ve never heard of, and people like Chris and I are likely too set up shop there but not do much else (we’re too busy), so we are effectively cash sinks that drain away resources from the bottom of the pyramid”
That’s true… just as you’re more likely to invest in any business you’ve heard of, or buy a product you’ve heard of, or watch a TV show you’ve heard of. But when that business isn’t providing you value, when that product is faulty or that TV show sucks, you have an option: get rid of it. On Empire Avenue, watch for those who don’t take the time to reengage their audiences to get sold off. Perhaps they are highly active and engaged across the social web… which is the entire point of the site; and if those people ARE engaged and active, their share price will continue to rise, their “daily dividends” will be respectable and, as such, “shareholders” will actually be getting a return on investment, and they will actually EARN virtual currency — again, this, along with actually getting people to invest in you, are the primary sources of income for players. Not referrals, not buying virtual currency. As a shareholder, you are rewarded for investing in people who create value online, and as a content creator you are rewarded by having others invest in you (thus earning you virtual currency).

“It’s got all the right mechanics to make its creators a bucket of money at the expense of people who want to be known in social media for any reason at all or are desperate to chase after any new shiny object, which is a brilliant design.”
Thank you! We do hope we can actually earn a reasonable income from this soon, so our CEO doesn’t have to sleep on friends’ couches on biz trips! 🙂 Anyway… there are users who’ve been with us for over a year and are still enjoying themselves, are still investing in new people that they’re interested in, are still making virtual currency (without having to pay for it, and long having exhausted the referral income), and who — no offense at all intended to them — aren’t playing the game to “be known in social media” or “desperate to chase after any new shiny object” — after all, the site was shiny to them a year ago.

“I’ve pretty much abandoned my account already, so I apologize in advance for being a massive cash sink in the in-game economy.”
Believe it or not, we’re entirely fine with that. If you’re off creating valuable content, you can still be a good investment, as opposed to a massive cash sink. If you’re not out there engaging your audience on Twitter, FB, etc., people aren’t replying to your content, and you’re generally not providing “value” back to your shareholders, then yes, you’d be a cash sink and, I suspect, would get sold off by some people who feel they could better spend their virtual funds elsewhere. And that’s okay, too.

After all, share price is just a number. We’re not going to tell you how to use the site or how to interpret your share price. It’s a number, and we’ve simply built a platform that makes it easy to find new people to connect with and then make those new connections, while getting some insight into your SM metrics. But if you think Empire Avenue is all about driving your share price up as some ego-boosting exercise, you’re missing the point. By being social — by creating content, by getting others to engage with you, by meeting new people — your share price will go up, and you’ll be an attractive investment.

We’re always happy to answer any questions, but hopefully you’ll spend some more time with the site before dismissing it as something it’s not!

– Tom, PR/marketing guy at Empire Avenue

Reply
1. June 6, 2011
  
  Amy D.
  
  I’m sorry Tom but I just tried Empire Avenue myself and I am not happy with it at all. I was hoping it would be “socially friendly” but instead it was nothing but a game. The minute I created my account, I was getting “slammed” with messages that I was being “bought” to getting “shout-outs” from others that I don’t even know at all on FaceBook and Twitter begging that I should “buy” some of their stock. Not a single “Hello…” from them at all. I deleted my EA account an hour later because I felt like it wasn’t considered as a human person in the world of social media but instead like an “investment”.
  
  If you want to attract new people to Empire Avenue, in my opinion…make it “Socially” or “Human” friendly and not like she/he is a stock that a person can buy/sell just like real investors do in the New York Stock Exchange. Now, I have no knowlege or experience in the stock market in real life and maybe that’s why I got so fustrated with Empire Avenue. If you would make it more “socially human friendly” instead of the “Social Media Version Of E-Trade”, I would give it another chance.
  
  And also after that horrible experience on Empire Avenue, I realize why do I need to have an “Empire Avenue” account. I’m doing okay with my twitter and facebook accounts (and I have a pretty good score on my Klout account) without Empire Avenue at all.
  
  Reply
2. June 6, 2011
  
  Amy D.
  
  I’m sorry Tom but I just tried Empire Avenue myself and I am not happy with it at all. I was hoping it would be “socially friendly” but instead it was nothing but a game. The minute I created my account, I was getting “slammed” with messages that I was being “bought” to getting “shout-outs” from others that I don’t even know at all on FaceBook and Twitter begging that I should “buy” some of their stock. Not a single “Hello…” from them at all. I deleted my EA account an hour later because I felt like it wasn’t considered as a human person in the world of social media but instead like an “investment”.
  
  If you want to attract new people to Empire Avenue, in my opinion…make it “Socially” or “Human” friendly and not like she/he is a stock that a person can buy/sell just like real investors do in the New York Stock Exchange. Now, I have no knowlege or experience in the stock market in real life and maybe that’s why I got so fustrated with Empire Avenue. If you would make it more “socially human friendly” instead of the “Social Media Version Of E-Trade”, I would give it another chance.
  
  And also after that horrible experience on Empire Avenue, I realize why do I need to have an “Empire Avenue” account. I’m doing okay with my twitter and facebook accounts (and I have a pretty good score on my Klout account) without Empire Avenue at all.
  
  Reply
May 12, 2011

(e)JOSH

Hey Chris, good read but i think you missed a lot of the mechanics of the site. Dividends are what drive the EA economy– money you earn from the activity of your investments every day/night. Referral income is actually just a peripheral reward for those who choose to try and earn it. The commission is simply a way of discouraging the over-gaming the social game. There are probably 5 dozen different ways to ‘play’ Empire Ave, spend some time finding one that suits you 🙂

Reply
May 12, 2011

Jeff Turner

Chris the way you make eaves in the game is through investing in others (dividends) and by people investing in you. Getting people into the site is only a bonus. Also money leaves the system just like it does in WoW. You can buying luxury items an the 5% to 30% charge for buying others stock. But the game really is a place for people to network together. I think maybe you should stick to just killing things in WoW or take another look at it. 🙂

Reply
May 12, 2011

judy shapiro

Gosh – in reading this one would think the the end game of Empire Ave was the game itself. IMHO – the game is besides the point.

As ever the marketing practitioner, I can see this is a powerful marketing platform where brands can interact with communities and “influencers”.

The game mechanics are only relevant to me in the context of the game’s ability to garner an audience. Good games gain players – bad ones don’t.

To me, the game s fun enough to gather enough of an audience to make it useful for marketers. But time will tell.

Christopher – I really appreciated your brilliant description of the game mechanics – quite useful. Thank you so much.

Reply
May 12, 2011

Omar Habayeb

BUY is the new AGREE and SELL is the new DISAGREE. I sold you off when I read this. Another Social Media “expert” who took no time at all to explore Empire Avenue before they “figured it all out”

Reply
May 12, 2011

Scobleizer

Heheh. I pointed this out in my first blog about Empire Avenue. It feeds on our narcissism and egotism. I’m egotistical. I love Empire Avenue.

But you are missing other things here.

First, it’s a news aggregator. One thing you didn’t even mention is this. By buying other people you are saying to the system “I want to see the stuff this person publishes.” It’s a much better news aggregator than I’ve seen elsewhere.

Second, people love numbers about themselves, but even more than that, we love numbers ABOUT OTHER PEOPLE! We love talking about numbers. “Did you hear how much Oprah earned last year?”

But, it’s clear you haven’t spent the time thinking about Empire Avenue very deeply. That’s disappointing, even though you got a good sensational headline out of it.

Reply
May 12, 2011

Allie Wojtaszek

I think perhaps you should actually “play” the game for a while before you declare yourself a gamer… even though I think the game itself is secondary to the real worth of Empire Avenue. I do think that after sometime of participating in the Empire Avenue community you will not only see everything you’ve missed to date but you will discover the value in it, Good luck!

Reply
May 12, 2011

WilsonTech1

I normally NEVER leave negative comments but I abhor this game and the insane marketing that is being done for it. To ME, It’s a time waster that does nothing to enhance our lives; I can focus my energies elsewhere; are people really THIS bored with their lives?

Reply
1. June 6, 2011
  
  Amy D.
  
  I have to agree!! I just tried Empire Avenue myself and there is *nothing* social about it. The minute I created my account and profile, I was getting “slammed” with notices of people “buying” me and messages of people asking them to purchase their stock…..not even a “Hello…Welcome to Empire Avenue”. I quickly deleted my Empire Avenue account an hour later.
  
  If you want to be “social” and network with others, Empire Avenue is not it. And if someone invites you to join Empire Avenue, take my advice……….RUN!!! Run Away from Empire Avenue and don’t look back.
  
  Reply
  1. June 6, 2011
    
    Jim Durbin
    
    Amy. When you joined Twitter, did you get people who followed you and said follow me back? Did you run away? There are settings you can use to block people commenting to you, and yes, there are people who are caught up in the selling aspect. For most people, in addition to buy me back messages, there is a lot of helpful information being passed back and forth. The site has seen a massive increase of players, and like all sites tries to walk the line between blocking bad behavior and enabling communication. Even Facebook, once famously closed, is now wide open.
    
    Is it really fair to say the game isn’t social enough, or could it be that some people aren’t very social, and you happened to be swarmed by a group? You could start a blog tomorrow that got 30 comments from spammers. Would that mean everyone should run away from blogs? Come back and try again. In fact, I’ll even give you some of my time to walk you through it if you have questions. Or don’t – it’s a game, and if it doesn’t provide you a use, don’t play it. No harm in that.
    
    Reply
January 2, 2012

Michael Murdock

Hey Chris,

I spend around 35 seconds or so in the ‘stock’ side of the game almost daily. Just to repurchase those who’ve purchased me. I find it fun to get the various achievements, but until I am truly able to convert my time here in to money I can get my hands on and do other things with, I will invest my time and money elsewhere.

But like Scobleizer said, the numbers are fun to watch and mine keep going up so am hanging onto the profile for a bit. DOCM is me on there.

Mike

Reply
June 1, 2014

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June 16, 2014

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September 11, 2014

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