Is Social Gaming Waning or Rising in Popularity?

is-social-gaming-waning-or-rising-in-popularityWhat thoughts rise in your mind when you hear the words ‘Social Gaming?’

 I immediately think of Zynga, so I feel obliged to tip my hat in the general direction of General Pincus. But how long is that thought going to arrive at the forefront of my mind before any other? What does the future of social gaming look like, and is it waning or rising in popularity?

Facebook

It would be remiss of me to write an article with the word ‘social’ in the title and not refer to the company, which at an estimated £106.5bn, is worth more kahunas than McDonalds, Amazon, Disney and Visa.

Facebook, and its one billion users, is the reason that the word ‘social gaming’ has become such a buzzword. It is also the main reason that the former social games king, Zynga, was able to grow into a monster in a relatively short period of time.

Yet according to a study by Piper Jaffrey, despite Facebook being at the top of the food chain when it comes to popularity, the numbers of teenagers using the social media outlet is falling.

So why is this important?

If anyone is (un)fortunate enough to be a parent of a teenager you can testify that in today’s society they are pretty darn difficult to please. The technological age has brought with it a sea of gadgets that must have Santa’s little elves in one hell of a funk come Christmas time.

Teenagers cost a bloody fortune and it’s the adults that are bearing the brunt of this expenditure. It’s thought that the teenager consumer segment is worth a staggering $819bn, with over half of the teenagers polled during the Piper Jaffrey survey saying that the habit of keeping up with the Joneses, on social media circles, very definitely influences where to spend that $819bn of mummy and daddy’s money.

If people want to sell a product via Facebook – and this includes social games – then the teenage market is a pretty impressive one. Furthermore, when we talk about monetization of gambling type games aren’t our teenagers the future gambling market?

So why are teenagers turning off Facebook, and what does this mean to the growth of the social games industry?

Facebook is nearly 10-years old now and with all things in today’s ‘what’s next society’ the interest is waning. Staring at photographs of your mates girlfriend has lost it’s appeal, people are fed up of the gossiping, the pressure of keeping up with the Joneses is too great, and the evils of procrastination are blamed squarely at the feet of the social media networks.

How many of your Facebook friends are actually friends? Do you talk to your real friends through Facebook, or do you pick up the phone or meet them face-to-face?

The growth of Facebook has also been it’s undoing, especially where the teenagers are concerned. Grandparents, parents and even those dirty uncles all have access to read your status updates, post on your wall and send you irritating messages to play Candy Crush and Texas Hold’em Poker…JUST F**K OFF!

The Pew Research Centre’s Internet and American Life project recently found that 61% of Facebook users had taken a break for all of the reasons I have named above.

When Facebook users leave, or even decide to just take a break, their revenue, and the revenue of those that rely on them, suffers.

Zynga

Between 2007 and 2010 Zynga turned into an absolute monster in terms of social gaming. It raked in hundreds of millions of dollars in venture capital, had huge gaming hits with the releases of Farmville, Mafia Wars and Texas Hold’em Poker, acquired 11 different companies and in 2010 turned in a profit of $90.5m.

The world was waiting to see just how big they could become?

 The poker world was buzzing as Zynga was pulling in more poker players than any other site in the world, including the one that rules them all: PokerStars. Surely, it was only a matter of time before they entered the real money gambling sector and money would come raining in?

Unfortunately, 2010 was the only year that Zynga has made a profit since 2008 as they have sustained a net loss of just under $600m. Industry analysts AppData estimates that Zynga’s monthly average user number has now fallen below 127m, the lowest in four years; and this year they lost more than a quarter of its loyal daily users in just one quarter.

The decision to move into real money gaming in partnership with Bwin.Party has not set the world alight, and Zynga has recently withdrawn its application for a Nevada Online Gambling License to concentrate on getting it’s shit back together.

As revenue falls, more and more employees are let go, resulting in more and more bad mouthing of the company and its former CEO. So what went wrong? The writing was on the wall when in March 2010 Facebook changed its policy on viral spreading. This change – created to protect their users from what was perceived by many to be spam – hit Zynga hard. Farmville usage dropped by 26% as a result of that one change.

Mobile

The recent successes of Temple Run and Candy Crush Saga are painting a solid picture. If you want to know where the next social gamers are hanging out you now know where to find them, and yet neither Facebook nor Zynga have a decent mobile gaming platform from which to spring.

Games like poker don’t offer a great appeal on the mobile device, and the more detailed games are nowhere near as enjoyable than on the console or desktop.

This leaves the games of chance like roulette, slots and craps; and also quick two-minute games like the aforementioned Temple Run and Candy Crush to dominate the market.

I believe this presents a problem for the future of social gaming, and the console has created the answer.

PlayStation and Xbox

The days of Pong are way behind us. Console games are fast becoming more popular than the movies. Grand Theft Auto V (GTA5) cost $265m to develop and created $1bn in sales in the first three days of its release. That’s more than the entire music industry makes in a month.

The depth and level of control that a player gets in a game like GTA5, FIFA Soccer or Call of Duty is unparalleled. So tell me. Why are our teenagers going to want to play in a simple game of chance like a slot machine or roulette?

David Perry of Sony said that the PlayStation 4 will be the ‘first social gaming network with meaning,’ and friend interactivity will play a huge role in the console’s infrastructure.

When children want to meet up to play they don’t go to the park anymore. They get strapped into their gaming chair, strap on their headset and play games with their friends.

That’s social. That’s gaming.

What’s the Verdict?

What thoughts rise in your mind when you hear the words ‘Social Gaming?’

At the beginning of the article I said my first thought was Zynga, but over a thousand words later I have changed my mind. In my humble opinion the future of social gaming is strong and it has its roots in the PlayStation 4 and Xbox One. The consoles will overtake the likes of Zynga and Facebook as the social media outlet of choice when it comes to gaming.

What about social gambling?

The casino establishments have seen it all before and have stood the test of time. Zynga’s blow up proves how difficult it is to turn gamers into gamblers, but the casinos know all the tricks of the trade, and will always find customers.

But the console guys have upped the stakes and I think the software developers that provide games in the casino industry need to take stock. If the teenagers of today are going to drive the growth of the casino market tomorrow, then they need games that give them the same sort of suspense, interconnectivity and control that the console games give them.

Mover over roulette and slots…here comes FIFA Soccer and GTA5?