The Future Of Social Gaming 10 Feb 2010 Justin Smith Europe Casual Connect Hamburg, GermanyPresentation Transcript
The Future of Social GamingEurope Casual Connect – Hamburg10 February 2010 Justin Smith email@example.com
The Social Game Landscape
The Western Market 2009: $490 million 2010: $835 million Growth on every continent
Virtual Goods in Asia 2008: $5 billion 2009: $7 billion Source: +8*
The Big 3 Zynga 700+ employees $200+ million in 2009 ~3x more DAU than #2 Playfish 250+ employees ~$75 million in 2009 Acquired by EA 11/2009 Playdom 300+ employees ~$50 million in 2009 #1 on MySpace
US Players CrowdStar Quick rise to #2 on Facebook by DAU RockYou Operates the largest ad network on Facebook as well Slide Was long time #1 by MAU (but not games), transformed business into virtual goods model
International Players Rekoo– Animal Paradise, Sunshine Ranch Elex– Happy Harvest Five Minutes – Happy Farm wooga– Brain Buddies 6waves – Adopting a publisher model
The Developer Opportunity Facebook continues to grow around the world First “truly global” social network Business models converging on virtual goods Can rapidly spend, test, and iterate for revenue Some challenges lie ahead Market getting more crowded, network effects kicking in
Social Gaming Distribution
Facebook 400 million users and counting – 70% of which are outside the United States Rapidly evolving Platform – new rules every 6 months Facebook Connect – bringing Facebook to every website and device Facebook Credits – coming soon
MySpace Used to be #1, now declining slowly Still #2 social gaming platform in the US Only the largest developers can afford to build cross-platform games
Global Social Networks Hi5 Orkut Friendster Vkontakte QQ/Qzone Bebo VZ networks Maktoob
Twitter Is this a social gaming platform? I don’t think so.
Game Portals What is the value of your portal’s social graph vs. Facebook’s social graph?
Facebook Connect Now, the same social graph is on any website, platform, device (mobile!) Same viral channel access, less Facebook.com constraint What parts of the Internet never developed because the social graph wasn’t available?
Rise of Virtual Goods in the West Now the major revenue model for western social game developers Variety of direct payment methods Offers still portion of purchases, but declining
Rush of Competitors “Social media/widget” developers New startups Traditional publishers Casual game developers Asian developers
Direct Payments Inside Social Games PayPal still very important Mobile increasingly important Asia with a commanding lead, Europe just behind, US just getting started Other alternative direct methods, like pre-paid cards, growing Zynga, Playfish, Playdom arriving in US retail Q4 2009
Performance Ads and the Offers Controversy Represent a minority of social game developer revenues – now smaller % Some ads were deceptive Self regulating pretty well, though platforms have most leverage
The 12-18 Month Horizon
Zynga From 0 to 10 million in 7 days – rinse and repeat Tough to defend against… The increasing value of cross promotion Smartest ad spenders behind LTV
Facebook’s Relationship with Developers Change is constant and expected 2 weeks ago: Email sharing 2 weeks out: The death of notifications What’s coming this year?
Changing Monetization Landscape Facebook Credits coming soon – but what will the rules be? Fees? Restrictions for other providers? Offers become less important Banner ads hanging around
Who will challenge Facebook? Is Facebook going to keep steam rolling social networks everywhere? Where will the carve-outs be, even where Facebook is far and away #1? Who is going to challenge Facebook’s social graph? Other games portals? Consoles, or device manufacturers?
2010 and Beyond Facebook grows to 500, 600, 700 million… Virtual goods become “normal” International opportunities grow Who will be the next CrowdStar?
Focused on the Facebook platform and social gaming ecosystem