@ Social Gaming Summit – What I Learned

David Eckoff — Fri, 26 Jun 2009 23:38:06 +0000

SAN FRANCISCO – I attended the Social Gaming Summit this week, and here is a digest of the most interesting things that I learned.

Justin Smith, editor of Inside Facebook gave a state of the industry. He defines social games as “casual games designed to be played with friends on online social platforms.”
Facebook has created an environment where there is no catalog, therefore “quality drives distribution.” (With no distributor, users are responsible for distribution.)
The web is the gaming platform, therefore the cost of production can be lower.
iPhones and other smart phones will make social gaming more accessible for people who have time on the go (vs. in front of a desktop).
Because there isn’t yet a social network imbedded in the mobile experience, distribution is more important. Much of the distribution from iPhone is driven by the Top 25 list.
Sebastian de Halleux of Playfish says: “For us, Facebook is the gaming platform. iPhone is an access device to that gaming platform.”
Companies like Zynga focus on cross promotion between games in their network. But it isn’t required for success. de Halleux notes that a game like Restaurant City achieved 5 million users in 5 weeks.
Most important: quality is the key driver, along with a link to invite a friend to the game.
As Jeremy Liew, of Lightspeed Venture Partners summarized: “Manipulating users to spam their friends is less powerful and effective than building a game experience that users will willingly tell their friends about.”
Zynga is ultra focused on metrics. In contrast, Playfish is ultra focused on fun. de Halleux notes that when everyone in the company can only do one thing, play the game all the time (!) they know they have the right game. In the end, “quality is the driver of distribution,” says de Halleux.
If you design a game in which it is more fun to have your friends involved, it drives distribution.
According to Mark Pincus, CEO of Zynga, social games need to do 3 things: 1. Give you a feeling of playing with your real friends; 2. Give a way to express yourself (about your unique personality); and 3. Give players the opportunity to invest in the game over time and have something of value.
Demographics: While the industry has sold to the same demographic, male age 25, de Halleux says that Playfish demographics are 50/50 M/F, and age 18-34. Most don’t talk about them as “games”, but rather as social experiences with their friends (“I just spend 2 hours decorating my restaurant with friends.”)
de Halleux says that games are not a science and that fun cannot be modeled. “There is chemistry with small teams of developers with full creative freedom to do something that will impact millions of people. “
When games go live is when the real work starts. This marks a long relationship between the user base and the developer team. Weekly releases nurture the game, and it is essential to listen to what the audience wants.
Pincus talked about the phenomena in which people are spending more money on virtual Christmas tree ornaments than on real Christmas tree ornaments. His theory is that people are increasingly disconnect from their friends in real life and they are staying in touch by social networks, so relatively few people see their real Christmas trees. In contrast, many people see their virtual Christmas trees.
As a culture, we’ve used up all the time we have, we don’t have any unallocated time. Social games enable people to have fun and justify that time by staying in touch with friends. The analogy: each touch point is keeping another spinning plate spinning.

Photo credit: Via Mike Trigg, Hi5.

RELATED LINKS:

Social Gaming Summit: In-Depth On The State Of Social Gaming (Gamasutra)
Crowdsourced Summary: 70 Tweets that Summarize it All (@MayankDhingra)
In recession, social gaming comes of age (VentureBeat)
Metrics for Social Games (Presentation slides by Siqi Chen and David King)
Social Gaming – Where’s The (Creator) Fun? (Gamasutra)
Social Gaming, Virtual Goods Discussed In SF Summit (Virtual Game News)
Observations from the Social Gaming Summit (Mike Trigg)

BONUS: State of the Industry…

Justin Smith, editor of Inside Facebook gave a state of the industry, with some interesting stats.
14,000+ games on Facebook in the past two years.
Usage distribution across those games: 5,000 games have 1+ monthly player; 1,000 games have 1,000+ monthly players; 300 games have 10,000+ monthly players; 100 games have 100,000+ monthly players; 30 games have 1,000,000+ monthly players; and 3 games have achieved 10,000,000+ monthly players.
Companies make money by a combination of user payments, offers (from third party companies such as Offerpal, Super Rewards, Peanut Labs, AdParlor, Gambit, and Sometrics), sponsored items (advertiser pays for distribution) and ads.
ARPUs: Top rates are $1.00-$2.00/month; and a good MySpace ARPU tends to beat Facebook ARPU’s ($0.60-$0.70/month vs. $0.30-$0.40/month).
Direct payments are increasing share of total revenues.
Top industry trends: free to play games on social networks, however a crowded monetization ecosystem; companies are focusing on monetization earlier; new games are bridging mobile and social; and copycat IP issues continue to be an issue.

The Future of Video Games Online

David Eckoff — Fri, 14 Nov 2003 00:53:57 +0000

This article was originally published on PaidContent.org on November 17, 2003.

Kim Cieslach (EA Sports), John Olshan (MLB Players Association) and John Rodman (X-Box) took the stage as panelists in this afternoon session at the Sports Media & Technology conference in New York City.

Cieslach noted that young men are leaving TV in droves and going to online video games. Olshan agreed: “They’re not watching Friends, they’re playing online games.”

Rodman noted that this audience is drawn to the competition, button mashing and escapism that online gaming offers.

An interesting point was raised that non-interruptive advertisements can be built into the real time play of online sports video games (for example: signage in the stadium within the game).

Cieslach said that the industry is in an experimentation phase, mentioning P2P wagering on games, subscription models and micropayments as examples.

In my next report, I’ll cover “NFL and the Online Subscription Revenue Model”.

David Eckoff blog » Games

@ Social Gaming Summit – What I Learned

The Future of Video Games Online