May 10 2010

Social Games – More a challenge rather than opportunity?

Answering in a single sentence, of course, social games have certainly become still unmeasured opportunity for the industry. Numbers in various dimensions¬†expose the obvious evidence. If you don’t believe then check Zynga’s last year revenue and active player base for games like Farmville, Mafia Wars to name a few. These examples prove that Facebook is great place to put your manageable risk for next development. Social Games have brought massive number of new gamers to the pool, if you have learned your lessons about diversity. Bar has moved in favor to our beloved and desired female audience. If you know or have will to learn how to attract them it’s just another positive argument for you to try your skills in area which is fresh new, still under dynamic development and with accountable space for growth and possible market leadership.

Big players have already realized it. EA’s purchase of PlayFish for about $300M, personally, blows my mind as for start-ups’ potential in this category. Success showing cosmic values. EA known in past to be whale swimming in slow-motion if we refer to innovation, reaction to new opportunities now plays in the first front establishing its own, rapidly growing department dedicated to social and on-line gaming.

Cake is growing and so are hungry mouths of bigger and bigger players in the industry. That’s pretty awesome to observe it, on-live, in just a couple of years. I presume it will continually surprise us in following years. Recent news around Facebook although help me realize that we might actually reach the first base now and games’ rules are changing.

In effect social gaming with much bigger budgets, big players involved and start-ups from past years becoming a multi-million ventures will probably have to review their strategy, size and risk taken for future projects.

One of the success indicators for games like Farmville was platform (FB) that has allowed to spread the word rapidly at minimal or no cost using social behaviors and in fact viral marketing. Facebook is interesting Web 2.0 entity. Scale of its own success brings him only enemies, er.. I meant followers. To maintain its position they have to change dynamically and respond with new innovations, security and privacy improvements (400+ million active users is hell-of-a-database I wish I had for Business Intelligence) and other aspects that may touch a 3rd party developer very painfully if we won’t understand them well or these changes won’t be communicated clear.

I have a perception that it’s not. Seems like in times of gigantic success we started to perceive Facebook not only as social-networking service (for end users), but also as a platform available to 3rd party developers. It’s nothing wrong with that as Facebook is great candidate to be named like that, but not to get lost on the path of building such a platform it has to have all its characteristics. One characteristic, very important in my opinion is technical and business specification not only for the current time but also for well defined future.

Predictability of what can possibly happen in next year or two may help me make my decisions and be predictable myself. Open question if that can be possible with Facebook, I don’t have clear opinion now. Seems like market does not either.

Zynga and other companies seem to believe in platform diversity. Games are hosted on Facebook, MySpace, MSN Games and by its own Dot.Com site. I personally believe that a single hub (or a few to keep things competitive) has now space to grow on all concerns Facebook has built. Sounds abstract but mainly because only Facebook has its proof point how to reach so many folks around the world and unfortunately in their story trigger pulled was not aimed at gamers first.