Startup Whisperer

Damn Stinking Apes - Lookout For The Small Game Developers

Our industry is clearly moving to freemium - sales of virtual goods on social networking sites, online worlds, and casual games were $9B in 2011(1) growing at 9.2% CAGR with Facebook and App Stores as the main distribution channel.

Social casual games (bubble, match 3 and casino) represent more than 50 percent of Facebook’s MAUs, and attract more players than the next 10 genres combined. Casual games like bubble, match 3 and casino are also gaining traction on mobile when free verses paid. But even with all these free games, only 25 percent of all of Facebook’s monthly active users play games on the site, according to an IHS Screen Digest report.

We also know that nearly half of all Facebook users log on through a mobile device including tablets, yet mobile versions of social games are still maturing and discovering these apps remain highly fragmented for consumers.

As an industry and as a games business, we need evolve in order to expand market share, and market position. But we also need to recognize that while games are a necessary endeavor to get a bigger slice of the current market, it doesn’t necessary grow the market overall. We need to make strategic investments in new ideas and innovations, create valuable partnerships that build stable and profitable businesses, and foster new economies that can attract and retain more social gamers.

Smaller game companies who are nimble and tenacious have a far better advantage to lead this industry evolution, and master social gaming experiences across multiple screens by 2015. Even Zynga’s CEO Mark Pincus predicted that in the next five to 10 years small developer that creates a breakthrough game has a real chance for a game to spread virally and leverage all of the traffic already produced by the mobile gaming industry, which in turns move the whole industry forward.

So it’s on us – the monkeys of the game industry.

Tips To Be An 800 lb Gorilla In Social Gaming

So what does it take be an 800-pound gorilla in the social games market in 2015, and master social gaming experiences across multiple screens?

Well first, we need to penetrate a wide and relatively untapped audience of mobile players with social games. Our research shows that there are just about as many players on the iOS platform as on Facebook, but iOS has about half the number of developers compared to Facebook. But getting games in front of mobile players isn’t easy, and the risks are high – just consider how Farmville flop on mobile.

Smaller developers are at a significant advantage over the mega-players to capture and grow the iOS market, both iPhone and iPad.

The rewards in terms of higher penetration and monetization rates for us far outweigh the risks compared to the large market leaders on iOS.

But discoverability is key, and we need to come together and explore new ways beyond Facebook and App Stores to social/mobile games in front of more players. This is where I believe investments need to be made, and new partnership models should be formed. I believe we need to come together as an industry to better collect and curate social/mobile games for consumers, and maximize the opportunities for great titles to get discovered across any screen.

Second, when we talk about better curating social/mobile games, we need to develop games in categories that are successful for Facebook and mobile. Freemium model is driving much of the current game growth for mobile across the top 25 and top 100 game types (>2 to 1), according to industry reports from AppAnnie and Xyologic. The top-game categories for iPhone and iPad based on gross revenues are action and adventure, arcade, casino, puzzle and word and simulation titles.

The freemium model reigns for casino, role-playing and simulation game genres; simulation is by far and away the most popular game category (~30%). HOG (Hidden Object Games) has shown success under free and paid models.

This indicates some strong synergies between the Facebook and mobile world to fully master a multi-screen social games experience. When we talk about investing and partnering in game curation and development on multiple platforms and devices, we need to look at monetization models and genres that can attract the most players, and give us the best returns.

That way I believe free casual games have the best chances of mastering social gaming experiences across multiple screens, attracting and retaining more players and growing the overall market.

Casual social games are where monkeys can become 800-pound gorillas by 2015, but it will take more than investments and partnerships to get there. We need to create new ideas and innovations around casual games on social, and we have to admit that Facebook games today are fundamentally anti-social. We need to bring forth fresh designs and mechanics into casual games that deliver highly social, immensely personal and extremely rewarding experiences.