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VC Defends Farmville, Touts Virtual Tractor Sales

theodp writes "In a blog post, venture capitalist Fred Wilson gives his thoughts on ripe areas for tech investment in 2010 — mobile, gaming, new forms of commerce/currency, Cloud platforms/APIs, education and energy/environment. Asked to comment on scams and social gaming (he is an investor in Zynga), Wilson defended Zynga's Farmville: 'Zynga makes almost all of its revenue on virtual goods. I said in my etsy/san telmo post the other day that more tractors are sold every day in Farmville than are sold in the US every year. That's where the money is in social gaming. The "scammy ads" thing is total red herring that everyone got excited about but is almost entirely irrelevant.'"

44 of 148 comments (clear)

  1. So? by Sycraft-fu · · Score: 5, Interesting

    In my Civ 4 game I built more battleships than the US ever produced in its history. Know why? Because it's a fucking game!

    I fail to see how they think that their number for tractor sales has anything to do with the fact that it is a borderline scam, and a crap game to boot.

    1. Re:So? by drinkypoo · · Score: 3, Insightful

      What's a scam about it? They explain to you in simple language that it costs money to have certain items. I play farmville when I am waiting for my brain to function enough to play AlphaC in the wee small hours of the morning (sometimes by way of Pioneers) and it's amusing enough. There's a cute little sense of community, gift-trading with friends. And it has cost me nothing but time (and a share of my internet access bill, I guess.) Don't hate the game, hate the stupid, stupid players who spend actual money on it.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    2. Re:So? by Rockoon · · Score: 3, Informative

      Very good game if you like turn-based strategy. Just one more turn...

      --
      "His name was James Damore."
    3. Re:So? by sopssa · · Score: 2, Interesting

      Of course its different and I'm sure he didn't really mean its comparable like that, but just gave an example (a car one too!) of the scale. It's also a far better business model than advertisement, since people like to feel better in games or have some advantages. Is it really that useful? Maybe not, but its entertaining for them, so let people do what they find entertaining.

      I agree somewhat that the scammy ads thing was uncalled against Zynga, since those ads were given to players by their advertising company and their advertisers. You should instead go after the people who make scam products, otherwise they'll just move to other avenues and scam different people. Go to the source of the problem.

      What I found interesting from the comments was

      Electronic Arts (ERTS) market cap is $5.8bln. Zynga is rumored to be around 1/6th. I'd like to be Zynga right now as they are built around the new model in the gaming industry.

      Even if we all here on /. hate twitter and facebook and such social sites (you have to interact with people!), social games on them seem to be a really big business. And it won't change from the "but they aren't real games and they're dumb!" yelling, because casual people like to play them and theres huge untapped revenues there.

    4. Re:So? by xouumalperxe · · Score: 4, Insightful

      and a crap game to boot.

      That's your opinion (and mine as well, actually). But what are we when faced with the sheer amount of people who do play it, and when enough of those play it hardcore enough that they'll pay for virtual property to keep a company afloat?

    5. Re:So? by TheLink · · Score: 3, Insightful

      Why should you hate the "stupid" players that spend actual money on it?

      They pay for the servers you use to play your game for free.

      --
    6. Re:So? by sopssa · · Score: 5, Insightful

      And even more so, why should you hate or think the people are "stupid" just because they pay for entertainment they enjoy? I wouldn't pay for it. I don't think it makes that much sense either. But if they like it and think it's worth it, just let them do what they want. It doesn't make them more stupid, they just have different priorities or things they enjoy.

      Just as well as they probably think you are being stupid to buy that newest $800 graphic card or spend so much configuring your linux when you could just run windows or mac.

    7. Re:So? by sopssa · · Score: 4, Funny

      On a slightly related funny note, people really bitch about everything:

      "Civilization IV: Colonization Called 'Morally Disturbing'"

      I literally exclaimed "holy sh*t" out loud when I was reading an e-mail this morning listing the "Games for Windows" coming out this year and I came across this:

      “Sid Meier’s Civilization IV: Colonization” (2K Games). In “Sid Meier’s Civilization IV: Colonization,” players lead one of four European nations on a quest to conquer and rule the New World."

      But goddamit, am I the only one who think it's morally disturbing to make a game that celebrates COLONIZATION? It's ironic, actually, because just a few months ago a friend sent me a link to some information about the original "Colonization" game from 1994 (pictured left) that this one updates. At first, I thought it had to be a joke, but sure enough, it was real. However, I dismissed it as a relic from a time when neither developers nor players took videogames seriously as media with moral implications.

      But the idea that 2K and Firaxis and Sid Meier himself would make and release a game in the year 2008 that is not only about colonization, but celebrates it by having the player control the people doing the colonizing is truly mind boggling.

      Remember all the debate when Newsweek's N'Gai Croal said of the "Resident Evil 5" trailer with the African zombies that "Even if you are familiar with the franchise, if you are familiar with those images and their historical weight, you look at it and say, 'Man, that’s kind of messed up.'" Well, I agreed with N'Gai on that issue, but in my opinion, a game about colonization is about 100 times more messed up. "Throughout history, colonization regularly involved stealing, killing, abuse, deceit, and the exploitation or decimation of native people," he added. "Anybody with a shred of moral conscience who studies the history will be appalled. Whether it was British rule in India or slavery in Africa or Aboriginal children kidnapped and taken to Christian schools in Australia or the dislocation of Native Americans in the U.S., there were no positive colonization experiences."

      Fritz said he's not calling for a ban on the game, emphasizing that 2K has every right to release it for sale. "But I think personally they shouldn't release it, if it's at all what it appears to be based on the early marketing," he continued. "And I'm hoping a lot of people agree with me and will say so publicly."

      That's pretty ridiculous. Imagine if he knew there were nuclear weapons and slaves in Civ 4.

    8. Re:So? by CharlyFoxtrot · · Score: 2, Informative

      AI is better but the interface is a pain. I don't need zoomable 3D battles of units, that's only interesting the first time you see it (like friggin' Battlechess.) I still say Firaxis peaked with Alpha Centauri.

      --
      If all else fails, immortality can always be assured by spectacular error.
    9. Re:So? by Anonymous Coward · · Score: 5, Informative

      The scam part is not in buying tractors or trading gifts, but in the "offers" that give you FarmVille currency in exchange for handing over your cell phone number, to which monthly subscription charges begin accruing without your knowledge. This usually comes hidden in a survey or game of some sort in which you either hand over the cell phone number directly (in the case of some surveys) or after playing, in order to get a PIN to let you access results from the survey or game. There's clearly no need for a PIN, as the results could just be displayed on the computer without one—the scammer just wants the cell phone number.

    10. Re:So? by sopssa · · Score: 2, Insightful

      Alpha Centauri would had been great otherwise, but future scifi thing wasn't that interesting for me. Not really the history part in Civ's either tho, I always just rushed to modern day with technology, but it's the necessary evil to build up your civilization for the modern days.

      Some mix between Civ 2 and Civ 4 would be great. Better AI, better diplomacy and other little improvements, but the interface should stay the same. They should do a 15th year anniversary edition for next year, like Blue Byte did with Settlers 2.

    11. Re:So? by Sycraft-fu · · Score: 2, Interesting

      My guess is it is two things:

      1) Novelty. I think the whole facebook games thing is novel to many people and thus why they are popular right now. I also think the market is more or less doomed in the long run. I think the novelty will wear off and given that most of the games are fairly poor quality people will go elsewhere.

      2) People who want to play at work. Flash games are a lot more obvious than facebook.

      I don't think the number of players are because it is good, I think it is just a fad.

    12. Re:So? by pherthyl · · Score: 2, Insightful

      >>Don't hate the game, hate the stupid, stupid players who spend actual money on it.

      Why are they stupid? I bet most people here have spent money on games. I spent a few hundred buying games through Steam, does that make me stupid? How is spending money to get in-game items for a free game any dumber than spending money to buy a game in the first place? In both cases you get nothing that has any relevance in real life, and in both cases you do it for entertainment.
      I don't play Farmville, but just like the Sim* series was popular I can see the attraction, and if a tractor helps you along in the game I can see the logic in paying for it with real money, just like back in the day I bought SimCity with real money.

    13. Re:So? by CharlyFoxtrot · · Score: 2, Interesting

      Alpha Centauri would had been great otherwise, but future scifi thing wasn't that interesting for me.

      I liked the whole living planet thing but then again I'm a big Frank Herbert fan so I was probably part of the target audience.

      Not really the history part in Civ's either tho, I always just rushed to modern day with technology, but it's the necessary evil to build up your civilization for the modern days.

      Interesting. I'm the exact opposite: I like building up a civ but lose interest when the game reaches modern times. Maybe that's why I liked AC with its focus on terraforming.

      They should do a 15th year anniversary edition for next year, like Blue Byte did with Settlers 2.

      Sounds great but if it's going to be anything like what they did to Colonization with Civilization IV: Colonization I'd rather they didn't. Unfortunately I think they are completely invested in the new Civ IV UI so the next iteration is probably going to be based on some updated version of it.

      --
      If all else fails, immortality can always be assured by spectacular error.
    14. Re:So? by pherthyl · · Score: 2

      >> steam imposes drm; you're stupid for putting up with it and you're stupid for encouraging it.

      I couldn't care less. Steam is cheaper (tons of sales, I've gotten plenty of games for 75% off), far more convenient (no physical cds to juggle, no updates to keep track of, synch to diff computers, no concern about backing your games up).

      Any game for any platform is DRM'd to no end these days. Steam doesn't add shit to that, it just makes it less intrusive. Steam is the best thing to ever happen to PC gaming. Makes it almost as straightforward as console gaming.

      >> you don't actually own the games you pay for on steam

      Bullshit I don't. I can still play every game I ever bought on Steam, which is all that matters, and more than I can say for many games I've bought (that came on floppies or CDs that scratched).

    15. Re:So? by Rude+Turnip · · Score: 2, Funny

      Yeah, seriously, what did the Romans ever do for us?

    16. Re:So? by zach_the_lizard · · Score: 2, Interesting

      Sounds like a typical American fskin religion where the pastor periodically asks the sheep for more money

      That pattern has been going on for centuries, and is not unique to the US. Religions of all kinds have demanded money all over the world.

      --
      SSC
    17. Re:So? by CrankyFool · · Score: 2, Informative

      It's worth noting that fuel is one of the things that you naturally collect over time in Farmville -- it takes about 8 hours for my fuel gauge to refill completely. Does mean you can't always use the tractor (or harvester, or seeder), but for me, given that the only real reason I have for using the tractor is to earn the King of the Plow ribbons, I'm OK with just using the fuel as quickly as I 'distill' it (partially because I have no intention of giving Zynga any actual money).

    18. Re:So? by bigstrat2003 · · Score: 3, Insightful

      More importantly, as I recall Valve has in the past banned someone from playing online, which also locked them out of all their games. Not that I condone cheating online, but "nuke all the games they bought" is not the answer to that, and it really makes me uneasy that Valve would do such a thing.

      --
      "16MB (fuck off, MiB fascists)" - The Mighty Buzzard
    19. Re:So? by uninformedLuddite · · Score: 3, Insightful

      I suspect you are an I-hate-DRM-fanboy and 90% of your games most likely come with root-kits instead of DRM (that may even be the reason that 'your' CD-Key was distributed online (I hear that mega-warez-IV distributes your CD-Keys for you as a helpful gesture).

      Managing to sucker a store clerk into letting you exchange the game just screwed over the next purchaser and means you aren't even worthy of me bothering to disrespect you. You suck.

      No wonder you posted anonymously I would be ashamed if I was you too.

      Of course you might have just made all of this up in an attempt to be one of those hip, happening, anti-DRM zealots who defend their rabid piracy by invoking the word 'freedom' in some catch-all phrase that appeals to all of the other 12 year olds who think they are hackers because they can use Winzip.

      BTW I don't like DRM at all but Steam seems to be the lesser of the plethora(yes kids IT IS a biscuit) of various evils out there(no one mention Crysis: Warhead)

      --
      The new right fascists are bilingual. They speak English and Bullshit.
  2. Too many "wrong" products... by Anonymous Coward · · Score: 3, Insightful

    Too many non productive "things" are becoming parts of a virtual economy. What is this? We are still living in RL, this isn't the Matrix and even if, the Matrix still has an RL "dynamic" that keeps it running.
    Real products (hard machines or what have you) need to be produced and sold to make an economy (and indeed humanity) better. Not virtual "stuff"....

    1. Re:Too many "wrong" products... by alcmaeon · · Score: 2, Insightful

      I agree with you. In this age where the Chinese have decided to base their economy on the old methods of building real products for real people and America's economy has turned to shit, thank God capitalism and that entrepreneurial spirit are still alive in America to save us. Now we can sell virtual tractors for our virtual farms. Take that, you commie gooks!

    2. Re:Too many "wrong" products... by Jeff+DeMaagd · · Score: 2, Interesting

      I agree with sopssa, it's a game. I think the minimum of what needs to happen to make a legitimate economy is that money has to voluntarily change hands. I don't see a virtual item is necessarily any different than some other worthless trinket. Non productive things such as games, movies and music are the same way, it now costs almost nothing extra to make more copies, but someone did have to make the original work.

      There's also a point where you don't need more real things, after you have your needs met and you're living a reasonably comfortable life, you don't need more things above food, water, energy and other maintenance items. Which I think inches closer to some visions of a utopia where we spend our time in a culture of art, albiet it's generally mass produced art these days.

    3. Re:Too many "wrong" products... by pmontra · · Score: 3, Insightful

      People buy many useless "real" things. Any of us does. If that useless stuff is good for the economy so are the useless "virtual" things of many games.

    4. Re:Too many "wrong" products... by Sycraft-fu · · Score: 3, Insightful

      I'm not sure what is stupider: Your retarded post that shows extreme ignorance of economics and manufacturing (here's a hint: the US is still the world top manufacturing economy) or the fact that you screwed your racial epithet up. Gook is an epithet for Koreans, not Chinese. If you are going to be racist, you could at least try and get your terms straight.

    5. Re:Too many "wrong" products... by 0100010001010011 · · Score: 2, Insightful

      "Real" stuff like pet rocks, virtual pet rocks, virtual pets, beenie babies, prayers, etc,

      Every generation has their "What the hell did we spend money on?" product. This one seems to have virtual products.

    6. Re:Too many "wrong" products... by nelsonal · · Score: 2, Insightful

      http://www.wisegeek.com/what-are-the-top-manufacturing-countries.htm The US still manufactures almost 2x what China does. Keep in mind that when things say made in china, that doesn't neccessarily mean all the components were made there. The US also manufactures large amounts of goods that aren't bought by individuals (like tractors, heavy equipment and airplanes). Just because we don't dominate toys and t-shirts doens't mean that we don't make plenty of other goods.

      --
      Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
  3. My rule of thumb. by Eric+S.+Smith · · Score: 4, Interesting

    I know nothing about this story, but I just always assume that anything built on Facebook is a scam, whether for money or ID theft. Go sell your virtual cheese elsewhere, vampire gangsters.

  4. Aquarium Screensaver by lucm · · Score: 2, Insightful

    Buying virtual tractors for a game seems ridiculous, until you compare it with buying virtual fish for a screensaver...

    --
    lucm, indeed.
    1. Re:Aquarium Screensaver by Xelios · · Score: 5, Interesting

      It seems ridiculous to you and me, but to the millions of people who aren't as versed in technology as the average /. user maybe not. A few weeks ago I finally caved and opened a Facebook account (albeit with fake info), solely to keep in touch with friends back home after moving to Europe. Quite a few of them are into the Farmville thing (mostly the women), so I checked that out and my first thought was "Wow, people actually pay money to buy things in this game?". I never would, but some of my friends have. I asked them why, why pay money for such ridiculously simple [crappy] games? "Why not?" they said.

      I thought about it for a while, and I really didn't have a good answer. I've paid monthly fees to play MMOG's before. I pay money for a usenet account. To most of my friends spending money for these things would seem just as ridiculous. It's all a matter of perspective. For them, that tractor in Farmville is about as far as they've ventured into the gaming world outside of consoles, so why not spend a little money for it?

      Now the really scary thing happened when I first opened my Facebook account. All the info I gave was fake, including my name, except the email address. I entered a really old Hotmail address that I stopped using years ago. Since then it's been my disposable email address for anything that wouldn't accept 10mintemail addresses. From this one piece of real information Facebook built a list of probable friends, and 80% of them were people I know. How they managed to pull this off with a 6 year old Hotmail address is beyond me.

      --
      Murphey's fighting Occam, and we're in the stands.
    2. Re:Aquarium Screensaver by karnal · · Score: 4, Interesting

      I'll elaborate on the AC that posted a reply to you. In my experience, Facebook does 3 things to find friends for you:

      1. Look through your address book and attempt to find people who match that are already in the system by e-mail (and sometimes name)
      2. Dig your e-mail address out of other people's address books that they've harvested from e-mail accounts. (this may or may not be a true statement, but judging by your comment...)
      3. Offer up "Friends of Friends" - chances are, you're friends with other people's friends, so they offer those too as suggested friends.

      --
      Karnal
  5. I was going to fabricate a pithy response, by cvtan · · Score: 2, Funny

    but I have to get back to Farmville! My pumpkins are dying and I have 57 gifts to receive.

    --
    Sorry, but gray text on gray background is making my eyes bleed.
  6. What does that even mean? Also, he's lying by Posting=!Working · · Score: 2, Insightful

    Might as well compare the number of virtual Nazi's killed in games vs. actual Nazi's killed in WWII. I'm guessing there's probably a few gamers who have exceeded that on their own. And, like virtual tractor sales vs. actual tractor sales it's a very potent comparison that proves....I mean, shows that.....I mean, suggests....I mean, that vaguely resembles...ummmmmmm...absolutely nothing.

    Might as well compare these:
    Cartoon cranial anvil assaults vs actual cranial anvil assaults
    "CSI" crime solving rate vs. actual crime solving rate
    Virtual car theft vs. actual car theft
    Porno movie pizza delivery guy sex rate vs actual pizza delivery guy sex rate

    BTW, his claim is BS:
    "Andrew Trader, co-founder of Zynga, said the company makes about a third of its revenue from advertising and another third from virtual goods transactions. The last third comes from companies that provide commercial offers, trading Netflix memberships and marketing surveys for in-game cash."

    1/3 is not almost all.

    --
    This sentence no verb.
  7. Two salient facts, Mister Venture Capitalist by garg0yle · · Score: 2

    Two things:

    1. Almost entirely irrelevant is not the same as being entirely irrelevant. There are people for whom Zynga's behaviour is atrocious enough to make them think twice about using its products.

    2. This doesn't change the fact that Zynga's games are buggy, derivative pieces of crap, and more than half of my friends who've tried either Farmville or CafeWorld have left their virtual farms and restaurants to gather dust. If you keep dragging newbies in, but most of those wander away due to boredom or frustration, that's not really a "growth" business plan.

    --
    Modding "-1, Troll" is not a proper response if you disagree with me. Try reason.
  8. Re:tractors - ??? - real money by Anonymous Coward · · Score: 5, Informative

    In Farmville things either cost coins or FarmVille Dollars (FVD). Coins are easy to get: whenever you harvest something, you get coins. Coins are spent on the "mundane" things. Crops, some decorations, tractors, barns (red only), a small pond etc.

    FVD are difficult to get. You get one FVD every time you level. Or you buy them. FVD's are used to buy more exotic things: barns (in a variety of colors), a large pond, special purpose seasonal stuff, a different class of decorations, fuel for your tractor, etc.

    Now, you don't strictly need to have all these goodies, but as people play, they have the oppurtunity to get more stuff (of course), and you need to have a place for your stuff. The only way to get more room for your stuff is to expand your farm. Now, you can expand your farm by either having lots of friends that play FV, and then it only costs you coins, or you can buy a bigger lot, which costs FVD. If your the type of person that buys a lot of the specialty stuff, your already buying FVD so buying the larger farms isn't that big of a deal.

    Now, to specifically answer the question: Although tractors, seeders and harvesters are coin based purchases, the fuel refills are not. Now, you don't need to buy the fuel, you can wait a day and get a free refill, but if you have one of the larger farms, you will not be able to harvest, plow and seed all of it on the one refill. And since you have a very limited supply of FVD that you earn.... It becomes a habit that must be paid for.
     

  9. Um, tractors by mrslacker · · Score: 2, Informative

    Except that tractors cost 30000 coins, which is easily obtained with patience, and doesn't cost any real money at all, certainly not the "FarmVille cash" - unless they've changed something recently.

    1. Re:Um, tractors by karnal · · Score: 2, Informative

      I think the scam is that you have to use their in-game cash (Farm Cash) to buy fuel refills for the tractors/harvesters/seeders. They don't have a current way to either get fuel as a gift or to purchase it with coins - the in-game currency that you gain by planting and harvesting crops.

      Similarly, expanding your farm's area can be done two ways - with coins or with their Farm Cash. But - for those of us without 200 friends that play farmville on a casual basis, if you want to expand the farm you need to have X number of neighbors for each upgrade if you use coins.

      Also, I haven't found a way to get Farm Cash without actually spending real money. Hence, I haven't spent the money on it because like others here, it's just a nice break away from reality for a few minutes. If that means I'm slightly hindered in my "progress towards nothing" then so be it.

      --
      Karnal
    2. Re:Um, tractors by mrslacker · · Score: 2, Informative

      Yes, fair enough. But the immediate suggestion elsewhere that buying tractors helps Zynga is false.

      I admit it, I'm level 40 - have been playing for a long time. I've never spent any money on it. You do get given FV cash occasionally on levelling up, but not enough to make a difference. I think I have 15 neighbors or something. I do my wife's farm too, which has helped with various bonuses, etc.

      Yes, the fuel thing is frustrating, since a tank is nowhere near enough to harvest/plough/seed, and you are reduced to thousands of clicks. However, some of the "holiday gifts" still available contain 1 or 5 tanks of gas, and next week is "free fuel week", whatever that means. No doubt of course as a promotion to encourage people later to buy it.

  10. virtual sales for virtual dollars by 192939495969798999 · · Score: 2, Insightful

    This is not the same as virtual tractors sold for real dollars. In farmville, if you play the game it earns you points you can use to buy a tractor. This would be like saying that more shields were sold in Zelda for NES than were ever sold in real life, and that this fact somehow made Zelda a great game. (Zelda is great for other reasons)

    --
    stuff |
  11. Uhh... by segin · · Score: 2, Informative

    I said in my etsy/san telmo post the other day that more tractors are sold every day in Farmville than are sold in the US every year.

    Well, at least you know why the economy is down the shitter, everyone's busy playing Farmville and not doing something productive.

    But who am I to judge, all I do is sit around and read Slashdot all day, so...

  12. If the scams are a Red Herring, stop them. by voidstin · · Score: 3, Insightful

    So, if the revenue really comes from honestly entertained consumers trading money for an enjoyable experience, fine. Do that. Stop it with the text message scams and toolbar downloads..

    But, since $9.99/mo in hidden text message charges > $1 for a tractor, it seems to me that the tractor is the red herring, in order to get you to the far more profitable malware. But Zynga can easily prove me wrong by stopping these practices....

  13. Re:Techs versus "The Cloud". by nloop · · Score: 3, Insightful

    It sounds fantastic in theory, but once in the real world, Cloud Computing falls flat on its face.

    Try explaining that to the 11 million people who play FarmVille. Or to Google. Sure, you don't like cloud computing, I don't love it either, but falls on its face? Nah. Epically popular? Yup.

  14. Do some real farming by pubwvj · · Score: 2, Interesting

    How about investing in real small farms.
    You don't have to be a huge investor.
    Make a small loan. Buy pastured pork.
    Build a future of real food.
    See below.

    Cheers

    -Walter
    Sugar Mountain Farm
    in the mountains of Vermont
    Save 30% off Pastured Pork with free processing: http://sugarmtnfarm.com/csa
    Read about our on-farm butcher shop project: http://sugarmtnfarm.com/butchershop

  15. Re:tractors - ??? - real money by RedWizzard · · Score: 3, Insightful

    Now, to specifically answer the question: Although tractors, seeders and harvesters are coin based purchases, the fuel refills are not. Now, you don't need to buy the fuel, you can wait a day and get a free refill, but if you have one of the larger farms, you will not be able to harvest, plow and seed all of it on the one refill. And since you have a very limited supply of FVD that you earn.... It becomes a habit that must be paid for.

    Except tractors, seeders and harvesters only reduce the number of clicks you have to do. They don't have any significant bearing on the game - you don't actually need them. Also a bit of planning can let you use them for free even with a large farm: just plant smaller plots with selected crops that will be due for harvest when you know you'll have fuel (this is actually just about the only scope for strategy in the whole game). So it's easy to avoid getting addicted to buying fuel if you don't want to.