35. Social Gaming Market
S
W
TRENGTHS
EAKNESSES
• Brands Visibility (InGame Advertising)
• Worldwide Exposure
• Social Media in great
growth
• Low-Tech needs
O
PPORTUNITIES
• Diversify social
network platforms
(MySpace, Hi5, etc)
• “Niche Trend”
• More time spent
online
• Global Internet
Penetration (23% in
2008; 30% in 2012)
Positive
• Reliance on the
Social Networks
• Charge for Ads,
Transactions and
Space (No Free
Virality)
T
Internal
factors
HREATS
• Initial Stage (Fragile)
• Social Networking
Fatigue (Loss of
Attractiveness; Fad)
• Highly competitive
market
Negative
External
factors
44. But It’s More Than Just Games
Friends
Play games with friends
and discover others to
play with
Purchase virtual items
and gifts for a friend
in the game
Virtual
Gifts
Purchase Facebook Credits
or similar “currency” to be
used in games
Social
Media
Credits
Social
Games
Purchase virtual items for
yourself within a game to
enhance your game play
45. How companies make money?
Developers and
Distributors
Social Networking
Platforms
Payment
Providers
• V-Commerce
• In-Game Advertising
• Sponsorships
• Percentage fee of transactions, ads and space for
virality
• PayPal
46. Zynga
Founded in 2007
Already profitable (47% margin)
$850 million revenues (2010)
Free Games
Virtual Goods X Real Money
Crops (FV), Guns (MW), Treasure (TI)
Over 215 million active users monthly
Valued at $4.5 billion
Big set of investors ($219 million)
and advisors
47. Virtual Worlds
• Users can create Avatars
– Alternative Identities
– “The Sky is the Limit”
• Corporate Opportunities
– Advertising
– V-Commerce
– Marketing Research
– Human Resource Management
– Internal Process Management
49. Facebook Credits
• Facebook is the biggest platform for social games, so Facebook Credits are
an important part of the social gaming market
• You can buy Facebook Credits via credit cards, PayPal, Facebook Credits
gift cards (purchased in a retail store) or mobile phone payments. You can
also earn credits through special promotions.
• Facebook CEO Mark Zuckerberg spoke earlier this year about wanting to
create a “level playing field” for social game developers on Facebook
“Making it so that there is one currency that people can take
everywhere levels the playing field a bit, which is good”
Zuckerberg said.
http://www.facebook.com/credits/
http://www.insidefacebook.com/2010/09/19/what-zyngas-switch-to-credits-means-for-the-facebook-ecosystem/
http://www.insidefacebook.com/2010/06/22/exclusive-discussing-the-future-of-facebook-and-the-facebook-ecosystem-with-ceo-mark-zuckerberg/
59. Winning at Social Gaming
•
•
•
Keys to Success: Social games require a platform, content and distribution just like
any other successful game. Today, most social games are not successful, but
moving forward, almost all games will have a social hook
Revenue Model for the game publisher: Despite isolated deals, the revenue
engine for casual gaming isn't brand advertising but virtual goods:
– Game studios fear bringing in brand advertising could destroy the game
experience
– The main hurdle for brand advertisers is that the biggest publishers are scaling
just fine without ad revenue
Brands & Social Gaming: Still very early days, but options include:
– In-game advertising
– Custom branded games
– Sponsoring existing games
http://mashable.com/2010/08/11/social-gaming-business/
60. Winning at Social Gaming
•
•
•
Keys to Success: Social games require a platform, content and distribution just like
any other successful game. Today, most social games are not successful, but
moving forward, almost all games will have a social hook
Revenue Model for the game publisher: Despite isolated deals, the revenue
engine for casual gaming isn't brand advertising but virtual goods:
– Game studios fear bringing in brand advertising could destroy the game
experience
– The main hurdle for brand advertisers is that the biggest publishers are scaling
just fine without ad revenue
Brands & Social Gaming: Still very early days, but options include:
– In-game advertising
– Custom branded games
– Sponsoring existing games
http://mashable.com/2010/08/11/social-gaming-business/
61. Some general highlights:
• Two-thirds of tablet owners report playing social games each day
• More than half (53%) of smartphone owners do the same
• Of the 50% (ages 18-44) who play social games daily, 54% are men and 46% are
women
• Men play more for competition, women tend to play out of boredom
The study asked respondents about playing social games in the workplace:
• Nearly half (47%) confess to playing social games during a typical day at work – again
more males (53%) than females (39%)
• 14% play social games like FarmVille and Bejeweled Blitz at work for an hour or more
• 55% of Americans said they were interested in working for a company that uses
gamification to increase productivity
62. Respondents were also asked about brands and their presence on social games and in
social challenges:
• Nearly two in five (37%) chose an online game as a preferred route to new product
knowledge (second only to email, preferred by 44%)
• 58% say it is important for brands to be fun and playful
• 57% of those interested in completing social challenges found product discounts a
“very compelling” incentive to complete them; another 37% found them “somewhat
compelling”
• 88% of respondents considered gaining loyalty program points to be at least
“somewhat compelling”
The study found that 71% of smartphone/tablet owners turned to that device when
bored, leaving plenty of opportunity for social gaming (and the messages brands may
incorporate into those games.) According to 57% of respondents, social games “help to
pass the time when I’m bored.”
63. In September 2012, 251 million people played games on Facebook, up from 226 million
in September of 2011. That growth is attributed primarily to the thing Facebook is best
at: social.
http://mashable.com/2012/10/25/facebook-gaming/
A few interesting figures:
• The money spent on video games in 2011 is more than 74 billion dollars, or an
increase of 10.4% to 2010. Gartner predicts this amount to reach 112 billion dollars
in 2015.
• The social gaming industry represents a market of 8 billion dollars in 2011, and
analysts predict 11.4 billion dollars in 2014.
• The virtual goods market (the purchase of virtual goods) should reach 20.3 billion
dollars in 2014.
• The gaming industry should reach 54 billion dollars in 2015.
• 41% of American internet users play on social games, which amount to around 98
millions people.
• 2/3 of social gamers are women.
• The population of mobile gamers is made of 53% of women.
• The average time spent playing by social gamers is of 9.5 hours/week.
http://www.sociableblog.com/2011/11/01/interesting-facts-on-social-gaming/
64. Jackson, N.J., resident Eileen De Peri estimates she spends about $40 a month to buy
"Farmville cash," buying items such as fuel so she can harvest her crops faster. "For a
stupid game, to me that's a lot," said De Peri, who recently had 18 games on "Words
with Friends," a Scrabble-like game, going at once.
How big a business is it? In its recent filing with the U.S. Securities & Exchange
Commission to go public, Facebook said the worldwide revenue generated from the
sale of virtual goods increased from $2 billion in 2007 to $7 billion in 2010, and is
forecast to increase to $15 billion by 2014.
Zynga, the publisher of Farmville, Cityville and others, makes up 12% of the social
media site's $3.7 billion in 2011 revenue, Facebook said.
Last week, Zynga said revenue amounted to $1.1 billion in 2011, nearly double 2010's
$597.4 million in revenue.
"There are just so many people playing that the numbers actually not only work out
positively for publishers, but in many cases can actually meet or exceed what they
would have gotten had they chosen to sell the title as a full-priced retail project,"
Steinberg said.