BUSINESS

Anchorage tops US social game markets; social game investment tanks in 2012

TAGs: 2bet2, middleware, social gaming, socialitize

social-gaming-investmentIt’s been estimated that Zynga earns 70% of its non-advertising revenue from just 0.5% of its users, the so-called ‘whales’ of social gaming, while Japan’s social game firms are reportedly dependent on so-called ‘haijin kakinsha’ aka ‘free spending wrecks.’ According to a recent report by social game researchers Playnomics, more of these types of players can be found in Anchorage, Alaska than in any other US city. VentureBeat reported that Playnomics’ data showed Anchorage leading all US markets in terms of average revenue per paying user (ARPPU) and by monetization rate. Guess there really is nothing else to do in Alaska now that former Gov. Sarah Palin has shot all its wolves from her helicopter.

Playnomics’ study of 30m social gamers (whether they played by PC, tablet or smartphone) around the globe identified Japan and Hong Kong as having the most dedicated gamers, devoting over 3x the global average time to their social game pursuits. Players in the UK were deemed to be the most engaged, given their 2x global average playing time and the 3x global average play session count. Ireland was second most engaged, followed by Macedonia, while China was dubbed the least engaged country. Across the globe, the average female player engaged in 22% more sessions than her male counterpart.

Investors have treated social game firms as the hot blonde at the bar over the past couple years, but this bubbly blonde bubble appears to have burst. Investment bankers Digi-Capital reported that investment in social game companies fell 94% (about a billion dollars) between 2011 and the end of 2012. A total of $853m was invested in social game development last year, and much of that was in the social gambling field. Mobile and the expanding middleware sector (a field that Calvin Ayre predicted was one to watch in 2013) were also top targets for gaming investment, respectively accounting for 35% and 31% of 2012’s total outlay. While overall investment may have cooled down, the relentless pace of consolidation has continued unabated, with some $4b spent on mergers and acquisitions in 2012. The number of M&A transactions fell by 27% in 2012, but the average value of each transaction rose 60% to $49m.

As if on cue, capital pools investment firm Cairo Resources has announced it will acquire Socializtize Limited, the folks behind social sports betting app 2Bet2. The Toronto-listed, Vancouver-based Cairo will exchange 15m common shares for all shares in the Gibraltar-based Socialitize under a shareholder-approved share exchange agreement. 2Bet2 currently boasts 5,900 daily average users on Facebook, and is also available via Android and iOS.

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