The rise of social games

This article was written for IABUK and first published on Friday, 16 April 2010

Talking at the Mobile Games Forum in January 2010, Vodafone’s Aaron Johnston said: “It wouldn’t surprise me if there was a larger trend over the course of the next year or two, of requiring people to be more careful with information than they already are."

As predictions go, it’s a bit woolly, but there’s a serious point behind the caveats.

Over the past 12 months, social games have invaded our Facebook updates. Zynga, the company behind Farmville, Mafia Wars, Fishville and CafeWorld among others, claims 70 million active users per day. An astonishing 30 million ‘virtual farmers’ play Farmville every day. Zynga’s new game, Treasure Isle, launched in April 2010 and gained an extraordinary 5.4 million players in its first week. Where’s the revenue? Zynga’s virtual goods are estimated to be worth half a billion dollars in revenue in 2010, and as of March this year it sells prepaid cards in retailers across the US. A report from SecondShares released in April 2010 values the company at as much as $5 billion.

Electronic Arts (EA) saw so much potential in the social gaming market that it bought Playfish, the second-largest social gaming company, and the brand behind games such as Restaurant City, Pet Society and the newly launched Hotel City, for $275 million in November 2009. Analyst with Lazard Capital Markets, Colin Sebastian, says that worldwide social gaming revenues will double in 2010 over 2009, to $1.3 bn. That’s a lot of game-playing.

What’s the appeal of these social games? Zynga’s Mark Pincus attributes a successful game to three principles: playing with friends; self-expression; and the opportunity to invest in a game over time.

It’s not all roses, though. Earlier this year, PC World reports that TechCrunch unearthed a YouTube video of Pincus saying he did ‘every horrible thing in the book’ to make money from game players in order to make money and get the company to profitability. TechCrunch cites a number of scams which include persuading players to download toolbars that they couldn’t get rid of and offering ‘free’ virtual currency or game plays (which turn out to be in return for monthly contracts with third parties). While players needed to invest in the game, the game didn’t always return the favour, it would seem.

But it’s still a young market: mistakes are made, even by the big players; and they’re taking steps to put these errors right. (The mobile phone market was dogged with similar claims in the early days of novelty ringtones and wallpaper downloads, when Jamster got into trouble for misleading children into signing up for long contracts for content.)

So, let’s give the industry the benefit of the doubt, and assume that as the market matures, such errors will become fewer, and consumers will become more savvy about the games they play. The novelty factor will wear off, and games that con you into long term subscriptions simply won’t survive in a competitive market.

What will keep consumer coming back? Back to Mark Pincus’ three principles: interaction with friends; self expression; and long-term investment in the game. We can assume that the trends we’ve seen in virtual worlds will carry over into the social gaming world: an increase in interaction and self-expression will embed users more deeply into games. Technology developments in social gaming platforms (such as MySpace’s ‘Games Gallery’; Bebo’s Social Games Experience – assuming that Bebo finds a buyer from AOL - and integration with iPhone or iPad for mobile gamers) will increase interactive functionality and take the appeal of social gaming to a broader audience than ever before. Players will have more freedom to personalise and adapt games, with more use of in-game chat; personalisation of avatars; and user-generated content (visual as well as text).

The implications of increased user-generated content are the same for social games as they are for virtual worlds and other online environments. The game environment has a responsibility to its players, and to brands getting involved in advertising or in-game offers (let’s assume for the sake of argument that a reputable brand will be smart enough to see through any game that’s offering them a scam-based involvement).

The most important issue is that players must be kept safe (particularly if the age of social game-players drops from its current older demographic) from abusive, illegal or otherwise harmful content posted by other users. The games must be secure, ensure that any personally identifiable information is treated responsibly and be spam-free. And, importantly, third party brands who are advertising within the games need to be sure their reputations aren’t going to be tarnished by association with spammy or abusive un-moderated user-generated content.

If 2009 was the year social games leapt onto our Facebook pages, 2010 will be the year game-makers take responsibility for the market they’ve  created.

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