It appears that the latest app fad, Draw Something, has become an alarmingly horrifying bust.
Zynga, for those who do not know, are the masterminds behind FarmVille, the highly addictive and completely pointless Facebook game that cropped up a few years ago. Building off of that success, they've rapidly released a slew of new games, all of the "casual" genre. They generate their revenue from multiple different streams, but they generally involve getting you to download the game for free, and then paying for extras later. Draw Something, like dozens of others, are now owned by Zynga.
It's actually a very popular business model, and one that is not necessarily bad. My current favorite addiction, Team Fortress 2, has adopted this model: after being a standard pay-and-play game for a few years, they decided to release it for free and charge for microtransactions, small in-game purchases. There are different ways of doing this, of course; many casual games let you buy stuff so that you get cool stuff quicker. These tend to be decried by gamers since you're basically paying for your victory, although most casual gamers, who are mostly playing for their own leisure and not to brag to their friends, may not care as much. More popular with players are the simply cosmetic changes--say, letting you name your weapons or allowing you to change item colors. They don't affect gameplay, but it makes the experience more enjoyable--and at 99 cents a pop, most players can justify these small transactions.
And yet, while Zynga isn't hurting (they cleared $300 million in revenue last year), they've had two spectacular failures in the past year or so. The first was Words with Friends, a vastly popular Scrabble clone that collapsed under its own weight. Unable to handle the massive number of new players, the game frequently froze and failed to connect after words were played. The fad also passed. Similarly, Draw Something's phenomenal success collapsed almost immediately once acquired by Zynga, as a poor word base (repetitions were common), only to be augmented by paid advertisements (who wants to draw Taco Bell?) caused former fans to simply stop playing.
Of course, while Zynga has bought games at their prime and saw them rapidly diminish in popularity, they have another business model, known primarily as "stealing other people's ideas." Again, two major cases of accusations of theft have been leveled at the company: the once-popular Mafia Wars was nearly identical to Mob Wars, while Tiny Tower was copied as Dream Heights. They've also gotten in trouble with the makers of Oregon Trail by making a near exact clone of that classic game. The law is tricky--you can't copyright game rules, but you can copyright the art and design of games--but their ham-fisted handling of the situation has already derailed several merger proposals.
In the end, of course, most casual gamers won't care about playing copied games, but will abandon games once they get bored. Based on rumors swirling about the company (they famously mistreat employees, most recently by demanding employees give back unvested shares or face termination), it's unlikely they have the corporate culture to maintain a succession of games to keep their brand afloat.