It boggles the mind every time I read about one of these "unlimited for life with a fixed initial cost" products.

In almost every case that I can recall it's been a result of a company having cash flow problems, often preceding bankruptcy. The article mentions that interest rates were high in the early 80s and it allowed AA to expand. They've done well to get away with it for now. Or maybe that's just a function of the cost being significantly high such that the market is small.

In the 80s in Australia there was a chain of health clubs that offered a life membership... shortly before going bankrupt.

This scheme has a number of problems:

1. Why offer frequent flyer miles at all? Those are to incent you to fly more but you can fly all you want anyway. I guess there's the option of giving them away but really you shouldn't get any;

2. Booking flights you never intend to take is obviously a problem. AA staff were complicit in that however;

3. An alternative would be to turn any ticket you buy into a first-class ticket. Free anything creates market distortions. It's nearly always better to have someone chip in something to incent the right behaviour; and

4. Life memberships are silly. If they want to attract the business flyers they were talking about it should be an annual charge.

AA are potentially looking at these people costing them money in the wrong way too. These people are essentially AA ambassadors who have paid for the privilege. How much does AA spend on marketing? How does it compare to the cost of these AAirpass holders? I bet these people otherwise sing AA's praises.

Also, what is the fill rate on first class seats on flights? I think part of the point of first class seats is they don't fill up giving premier passengers the ability to buy tickets on short notice. If so, it's incorrect to view each seat taken by an AAirpass holder as a seat not hold (in much the same way as the RIAA/MPAA view every song/movie downloaded as a one not sold).

I find it interesting how Apple is defended when they make security blunders, while Microsoft was heavily slammed back in the day.

It is simply inacceptable that a user basically reported the issue on their support forum and didn't even get an answer back.

This story (Draw Something losing ~5M customers/month) annoys me. It's an example of not knowing the difference between causation, correlation and coincidence. In at least some cases people are making that "mistake" for link-bait reasons and to push an agenda (eg they hate Zynga).

The idea that 5M/month Draw Something care about the Zynga purchase is ludicrous. It seems Zynga has made some annoying changes to the game, at least for those that use Facebook to login, but even so.

I think the only story here is that Zynga overpaid for something that was peaking. They may purchased OMGPOP just in case it turned into something huge. There's plenty of that going on (cough Instragram cough).

I've tried Draw Something. It's amusing and I can see the appeal but from all usage patterns I've seen the game has a pretty short shelf life. A game with a short shelf life is going to lose lots of customers once it peaks. It's inevitable.

As for how easy it is to make a game, that's actually hard. I believe you should also separate "normal" games from "social" games here as both are radically different.

Normal games are like blockbuster movies. You want people to buy up big. You deliberately build up the hype. There is very little in the way of long tail in revenue in most cases (other than sequels). I consider this a fairly "honest" or ethical practice because you pay the sticker price and you have your fun.

Social games are more like TV shows. You're trying to build a persistent audience and you're all about the long tail. The part that bothers me is the psychological trickery that goes into this. Social games are really about manipulating the psychological triggers for addiction and I don't really see a distinction between this and, say, gambling addiction.

Some people spend an awful lot on these games (I believe Zynga calls people who spend over $10k "whales" [1]). Zynga and similar companies like to whitewash this with "maybe they're just rich". I believe they know better. They are (IMHO) preying on the weak and those arguably with mental health problems ("it's not unethical, it's funethical!").

Successful social games are all about Big Data. Figuring out what works, what doesn't, analyzing your customer usage and adjusting to maximize revenue and retention.

They're not even "games" really. They're just exercises in repetition.

Anyway, rant aside, I don't like Zynga either but please don't confuse the OMGPOP purchase with a short shelf-life peaking purchase.

[1]: http://www.businessweek.com/magazine/zyngas-quest-for-bigspe...