Social networks have seen a huge growth not just in Turkey but also all around the world. While internet users were spending their most time with pornographic content, social networks became the most important content since 2007. Ok, but where does games lie in these fast-grown social networks?Social networks are actively used since 1997 with different user motivations like professional life, interactions with friends, flirting, etc., but now one of those social networks, Facebook, with its 400 M+ user base is the most popular one with ability to answer different needs of it user base.
Under the high penetration rates of Facebook, there are several important factors like offering service in more than 70+ languages. Besides, Facebook’s continuous improvements for maximization of user experience seem valuable for retention of current base. Today people are asking for more than just meeting with new friends or chatting with friends, they want to spend “enjoyable time”, they want “entertainment”. Under the high popularity of all games living in social networks, “spending good time” seems to be the ultimate desire. In a research that has been done by PopCap, 53 % of users said that they are playing social games for fun, 45 % of users said that they are playing to be relieved from stress.
It has all started with “pokes” and continued with sending gift, birthday cards and little games. Social games and applications have been growing since mid 2007, after Facebook’s decision of opening the platform for 3rd party applications. When we look at the games of that period like, Scramble, PathWords, Word Twist, Sudoku and Attack!, we see turn-based, asyncronous mechanics. On the second stage with YoVille, Mafia Wars, Zynga Poker we see shorter play times but daily play frequency is increased. And now, social interactions, strategic depth and multiplayer support is preferable for next-gen social games.
On Facebook platform 250 of 500.000+ applications have more than 1 million users, in application leaderboard 6 of top 10 applications are games, all these numbers show us the importance and popularity of social games.
As Lightspeed Venture Partners managing partner Jeremy Liew has stated there are 3 basic factors underlying this huge growth of social games, these are; “development”, “distribution” and “discovery”.
Development: If we compare classic PC/Console games with social games, we can say that PC game production is very similar to a movie production. Approximately a PC/Console game is produced with 30-50 Million $ budget within 3-5 years, therefore high sales numbers are needed in order to cover the costs associated with production. This situation stands as a big entry barrier for smaller develeopers who cannot afford those types of costs. However; social games are produced with 300.000$-500.000$ budget within 3-6 months. Besides, social game developers publish the game as beta therefore they have the opportunity to get gamer reactions and iterate&design according to those reactions.
Distribution: For PC/Console games, retail channel has a crucial importance, it is nearly impossible for a game to be successful without being sold in the classic retail channels like Walmart, Gamestop, BestBuy. But, because social games are played over internet browsers, everyone has the opportunity to reach this content with some limitations on the hardware, of course. This is a huge cost saving for developers. Besides, free-to-play model is another advantage for social game developers, with this model gamers are not needed to pay for the content without playing it and money spent on the content is lesser.
Discovery: PR and advertising are the most effective activities for discovery of a PC/Console game however for social games, besides PR and advertising “virality” is very crucial for discovery. Facebook has limited virality with the latest devellpments, but successful social games use the “virality” for spreading the word in a very cost effective way.
Those 3 factors stated above make social games advantageaus with respect to PC/Console games and contribute to the growth of social gaming category. Moreover, easier game mechanics, visual codes, happier stories attract non-gamers with different demographics to play those games.
Increase in the sales and transaction number of virtual goods, growing population on Facebook, and growing number of social gamers makes social gaming space attractive for developers all around the world which causes clutter in the space. However we believe that there is still room for smart and fast developers that can design games with respect to social game dynamics and social interactions.
Latest researchs show that, 55 % of social gamers are women, 45 % of social gamers are male. In another research done by TNS, average age of social gamers is stated as 29 for USA and 27 for Europe.
Unfortunately, in those researchs there is no specific info given for Turkey, but in November 2009 GFK Türkiye and METUTECH-ATOM has published a research (not just for social games but all games), according to this research average age for Turkish gamers is stated as 20 and players below the age of 18 resembles 59 % of total gamers. Male population among gamers seems higher as its the case in the internet usage demographics of Turkey.
Popularity and huge growth of social games attracts developers attention, when we look at the biggest social game developers, Zynga is the leading developer with its 42 applications and 240 million monthly active users. Rock You and Playfish, acquired recently by Electronic Arts for 400 million $, follows Zynga on the top developers list. In this list, each of the top 5 developers has more than monthly 30 million active users. Currently, on Facebook there are more than 8.000 game developers and this number is growing significantly. Despite the virality advantage that makes social games so popular, recent developments in Facebook platform decrease the virality factor. This is the biggest challenge in front of the new developers preparing to enter social gaming space on Facebook.
Big guys in the social gaming space use cross-promotions within their games or big advertising budgets that keeps their growth besides viral design. However, smaller studios are looking for investment opportunities for marketing expenses and to be acquired by big guys in the space.
3 types of revenue source is present in today’s social gaming space; in-game advertisements, “offers” and micro-transactions. Micro-transactions depend on the purchase of in-game objects with real money. Virtual goods sales, biggest revenue source of social game developers, has been multiplied by 4 times in the last 2 years.
Gamers have different payment alternatives for micro-transactions those are; payment by credit card, mobile phone, bank transfer, etc. All different payment alternatives are put to increase the conversion rate for payments.
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