When will Microsoft figure it out?
Today, Facebook claims to have surpassed 750 million registered users. I wonder what percentage are on there to play games?
Last week Zynga filed for an IPO, stating close to $600 million in revenue last year, and over $230 million in the first quarter of 2011 alone.
Some simple facts to illustrate the power of social gaming, and more importantly the mico payment for virtual goods industry.
While I love the revolution going on to really open up markets for creativity (more on that in the future), Facebook as a platform is really ill suited for games. Originally it was fantastic, social, casual games could inject "viral" elements into their games which would provide free advertising to their friends and eventually their friend's friends. Many people complained loudly about this as the amount of spam was untenable, but more importantly Facebook took notice and started to wonder why not restrict the virality of games and force people to spend money on advertisements? I mean you can only collect so much on the low grade adverts they used to display. While this certainly did not kill virals, it certainly restricted them, and forced game developers to seek alternative means to spread the word on games. Mostly, I believe this impacted game companies just starting out, forcing them to spend HUGE sums of money on advertising to get the word out. Zynga and other larger companies with breadth did not have to worry too much about this as they could leverage their existing users and cross promotion capabilities. Next phase, enter Facebook Credits. Quite a racket that is! All of a sudden the accessibility of this distribution platform is all but gone. What, you start a cool game, are forced to spend somewhere between $.50 and $1 per click to advertise for it to build a user base, and on top of that now you have to turn over 30% of your revenue just to have Facebook handle the financial transaction? You can begin to imagine that what was originally a mole hill to get your game out there has turned into Mt. Everest!
What about Google Plus? Well, I'll reserve judgement there until I know more about what capabilities they will provide when it comes to developer access points and terms of service. I do have high hopes as I believe they are more centered around a content distribution platform, whereas Facebook is more about information sharing.
So, which big elephant is missing from this party? Microsoft!
I hold that in the last 5 or so years, the most innovative thing that has come out of Redmond is their Xbox Live Platform. We'll call it the social network for gamers! This network is the primary reason, in my opinion, that Xbox still dominates the console market. Why don't they make the platform more social and open it up to developers and social games? The problem is they still don't get it up there. They still insist on a culture of control and have nightmares about what an open platform could mean for them. What the nightmares prevent them from realizing is money! Money from advertising, money from achievement integration, money from more subscribers... MONEY! You see more and more even traditional gaming companies are realizing the benefits accessibility in the browser provides. While it does not provide the same immerse, high fidelity environment they are used to creating, it is very accessible, a proven money maker, and can be an efficient way to extend the game franchises they have worked so hard to create. We have titans like Civilization, Age of Empires, Assassin's Creed, etc.. making their forays into social gaming. All of this adds up to huge sums of cash, and why Microsoft is absent from the party is beyond me!
