Sunk cost is based on the idea that people have stronger emotional ties to things they have lost (including intangible things such as time) than they do to things they have gained. It also claims that the psychological drive to get back things that you have lost will cause you to do some pretty wacky things. Such as pay for a virtual currency named Farm Cash. Or beg your friends to help your revive your crops.
FarmVille uses the ideas of loss aversion and sunk cost to drive many of its features. The game encourages players to plant a large farm full of seeds that take time to grow, start building structures, and plant some trees, and then sends you away to enjoy your life (or another game). It's the fact that you know your crops will wither, that your trees will be blossoming and ready for harvest, that your structures are waiting to be completed, that makes you want to come back. You don't want to lose out on your time investment (even though you can't get that time back). And of course, you can pay your precious real life cash to prevent bad things from happening to your crops.
Of course, this isn't the first time we've heard someone trying to completely dismiss our love of the game as a psychological addiction. However, what this article fails to recognize is that the game can still be fun despite a known economic theory driving much of the original game's design. I don't personally play FarmVille because I want to tend my cows and my crops and prevent losses or get back time that I've already spent. I play it because I like to decorate my farm. I like the collection aspect of the game. And other players enjoy FarmVille for completely different reasons.Farmville players are mired in a pit of sunk costs. They can never get back the time or the money they've spent, but they keep playing to avoid feeling the pain of loss and the ugly sensation waste creates.
Sunk cost may explain why FarmVille grew so fast, or why it continues to be a prime money maker in the social games space. But in my humble opinion, blanket statements such as "FarmVille isn't fun based on X fact or Y fact" are completely unjustified. Millions and millions of players enjoy FarmVille for a variety of reasons. Not every gamer is the same. I certainly don't feel like the game is exploiting my psychology, I just like making stupid decorations out of damn haybales.