PICNIC Special on Social Gaming

Facebook + gamingA PICNIC special that I was particularly interested in on Friday was the Games go Social organized by Ex Machina, an Amsterdam based company that enables social gaming across mobile, web and broadcast. As described in the PICNIC program guide the session was promising: industry leaders, interesting case studies and panel discussions with visionaires were planned to give attenders a deep insight into the future of Social Networking (SN) and gaming.

The special started of with an interesting and clear presentation from Kristian Segerstrale, CEO Playfish, a social games company. Based on deep insights in both the gaming and SN market he was able to express why social gaming is the next logical step for both industries. In order to increase the life cycle of existing SNs such as Facebook and MySpace they have to improve constantly otherwise users will not come back and get bored of the service, social gaming will make the users come back. Kristian argued that the gaming industry is missing out a large piece of the market because there are a lot of emotions that the gaming industry has not tapped in yet, namely social emotions like love, envy and pride. Until recently most games were played in solitude and social gaming will change this. As Kristian pointed out gamers will not have to identify themselves as gamers or hardcore gamers anymore. In the future more and more people get in touch via friends or persons they know as opposed to having to go to a store and buy a game, which acknowledges that you are a ‘gamer’.

Games can tap into SNs and know who your friends are. Unlike the mobile market where companies always had to wait for new more sophisticated handsets that are able to run certain games or applications, SNs have provided the market with a ready to tap in infrastructure or digital village. According to the experience that Playfish has build up in little more than a year social gaming has certain characteristics:

  • The games are played with Real Life friends
  • The audience is massive: the infrastructure is aleady laid out, just think of the sum of all members of Facebook, MySpace, Hyves, etc
  • Engagement is high, people play around 30 minutes a day.
    The demographics are very broad
  • Social Games have new kinds of mechanics (more socially targeted, also business models differ: digital goods)

Case studies that Kristian mentioned were among others the immensely popular ‘Friends For Sale’ game on Facebook and the by Playfish developed ‘Who Has The Biggest Brain’. Through these examples it became clear that social games are very different from regular casual games because they demand much more interaction, emotion and social engagement from users and their real life friends. Also the distribution of social games is different: 95% of the players get in touch with the game through viral word of mouth within existing communities.

Based on the first half of Kristian’s presentation it seems that the future looks very bright for the young but vastly growing industry, but there are some possible pitfalls and social gaming faces several challenges. First of all experience has taught the industry that creating a hit game is very hard. It seems that most of the success social games on Facebook were lucky shots that sticked coincidentally. The time and expertise needed for deliberate and sustainable success should not be underestimated and the young Playfish is still learning a lot every day. An essential element for a bright future of the industry is getting the monetization right. Besides the more common advertising and branded game model there have been successful cases of the implementation of a partial digital goods business model. There is plenty that social gaming companies can learn from for instance Korea (think Cyworld) or China (Shanda or Tencent with QQ) on digital goods monetization systems. Also in order to build for the long run, users have to be approached with honesty. The market has to be prevented from spam and hit-and-runs from companies that try to make a quick buck. I think Facebook can help here because it is also very much in their interest to prevent the SN from being flooded with ‘crap’ games. Lastly a more broad adaptation of OpenSocial is needed in order to get the industry to a new level.

After Kristian a venture capitalist from Atlas Ventures, Maximilian Niederhofer, added some more insights in the direction the social gaming market is going. Maximilian showed the crowd some interesting statistics to put the potential growth in perspective. In the current gaming market the best selling console is the PS2 with over 120 million sold. When you compare this with the amount of people that make use of Flash in the world, 1.2 billion, one can imagine the potential that social gaming has.

Wii adFurthermore Maximailian incorporated on the idea that Kristian had mentioned before. Where currently real ‘gamers’  have to commit to a game and subsequently find friends to play with, social gaming will turn this around: you have friends first and then gaming comes into play. Nintendo Wii was one of the first consoles that understood this, when you look at their ads it is not about graphics but all about playing and having fun with your friends. Basically the emphasis has shifted from graphics and gameplay to social emotions.

The third speaker of the PICNIC special was the CEO and founder of Social Gaming Network (SGN), Shervin Pishevar. SGN is currently one of the leading social gaming companies in the world and has developed among other the successful Facebook social game and community Fluff Friends. A game that got special attention was iGolf (check out the TechCrunch clip below), an iPhone game where you can swing you iPhone like a golf club, very cool and innovative, but not very social if you ask me. Shervin gave some great insights in the statistics of social games in general based on SGN numbers. Among others he mentioned several strategies and mechanical changes of a game to lengthen the relatively short life cycle and accelerate the growth in daily active users (DAU).

After a short brake all the speakers sat down for a panel discussion where it was emphasized how many possibilities there are in the growing market. A special note was made on localized social games. There is no company that has really excelled in this yet and there are plenty of opportunities for start-ups in this area according to all panel members. The rest of the day there were several interesting case studies and presentation from among others Bigpoint (browser based MMOs), watAgame (Go Supermodel),  and also Yme Bosma from the popular Dutch SN Hyves spoke briefly about the future of SNs in Holland, gaming and mobile. The day was concluded by another panel discussion where subjects as for instance the definition of a social game and the possibility that social games offer for marketeers were discussed. Overall the Social Gaming special was very interesting and insightful, it provided me with some great insights in where the market is going and what the SN and gaming situation will possibly look like in 5 years.

For more information on Social gaming:

http://www.plus8star.com/resources/BDEJ_PlusEightStar.pdf
http://www.insidesocialgames.com/
http://www.littlebigplanet.com

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