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Is It Too Late for Smaller Developers on Facebook?
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Is It Too Late for Smaller Developers on Facebook?

December 19, 2012 Article Start Page 1 of 3 Next
 

Jay Aird, co-founder of social analytics company dystillr and Karma Gaming, examines how a small developer can grow in a crowded Facebook market.

It's no secret that the success of social gaming has led to a major influx of competition. While barriers to entry remain relatively low, the barriers to achieving success are a different story.

Today, Facebook game developers find themselves in an increasingly competitive environment dominated by a few major players. Production values have gone up, as have platform and acquisition costs. It's a hits-based business where you need not just a great game to win, but also a deep understanding of how to use the Social Graph.

Given these challenges, is it too late for smaller developers to find success on Facebook? We don't believe so. What we believe is developers targeting Facebook need to spend more time thinking about the business of games and be more strategic in how they choose to compete.

A good starting point is with a thorough analysis of the Facebook market. In this feature, we'll provide a high level analysis of that market and explore techniques developers can use to quickly and efficiently determine where and how they can compete and come up winners.

What is happening in the market overall?

What's happening within the overall Facebook environment? While many reports suggest social gaming has peaked, the absolute figures in terms of the player base indicate otherwise. Across all games on Facebook, there are currently 153 million daily active users (DAUs), a 28 percent increase over the past 12 months.


Click for larger version.

Growth genres versus declining genres

A valuable strategy developers can use to increase their opportunity for success is to focus on games in genres that are experiencing rapid consumer uptake or, alternatively, in genres that are under-represented. While Facebook games on the whole have gained users over the past year, the fortunes of different types of games have varied widely.

Simulation-type games (FarmVille-style), which once commanded an overwhelming majority of Facebook game players, have lost significant market share. The simulation game genre peaked in January 2011 with an aggregate 400,520,000 monthly active users (MAUs) and has fallen 34 percent since that peak to an aggregate 262,944,143 MAUs as of October 2012.


While still the largest genre in terms of monthly active users, simulation-type games peaked in January 2011 and are currently in decline. Growth on Facebook is now being led by genres such as gambling & casino, puzzle, and card & traditional. Click for larger version.

So how has the overall ecosystem grown in size while simulation genre games have fallen so sharply? The answer is the market is becoming more diverse, which is driving new growth. In particular, growth has been driven by puzzle-type games and gambling and casino-themed games. Together, these game genres reach over 50 million daily active users, an 86 percent increase over the past year. Notably, this figure now exceeds the 39 million daily active users across the once dominant simulation genre.


We can see the market is evolving from a simulation genre-dominated ecosystem to an increasingly diverse games market. This trend is being driven by the consumer's demand for more diverse game experiences on Facebook, a positive for smaller, specialized developers looking for opportunities.


Article Start Page 1 of 3 Next

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Comments


Tamar Curry
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One more way to make your game successful: Make. It. Fun.

Ramin Shokrizade
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The barrier to entry has always been low on Facebook, because the production qualities have always been low. Production quality has not changed all that much over the last four years. What has changed is the cost to market your product on FB. This was what made it so easy for Zynga to get in and expand in their early years. Now that FB charges appropriately for marketing in their space, and there is abundant competition lured in by Zynga's success prior to that time, getting your product under the nose of consumers is quite the challenge on FB. Zynga still has a huge advantage here with their market share but seems unable (at least so far) to take advantage of this with higher quality product offerings that would be difficult for the competition to replicate.

There is still great room for growth on FB, primarily because the quality of what is on FB now is still so low that existing products are vulnerable to competition from a good design. That growth is not likely to come from small fish, however, as replicating existing products and business models on FB will not gather the attention of consumers. Making a unique and high quality offering will not be cheap, though can still be done for a fraction of what a typical "AAA" product can cost to bring to market. Some big fish, such as EA, have attempted to enter the space with bigger budgets, but have failed due to employing derivative game designs and outdated business models.

Logan Foster
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One massive problem with Facebook gaming that is a huge barrier is what the 800lbs Gorillas are willing to pay to acquire users. Over the past year we saw a lot of the big names on this platform crush their competition simply because they were willing to come in and pay large sums of cash to buy premium advertising to entice users into their games, so much so that they drove a lot of small and mid-sized players off of the Facebook platform (FYI this is a problem that we are now seeing on mobile as these same large players try to push their way onto that platform and pay updwards of $8 for click thru install for advertising).

Yes you can always succeed by making a great product, but IMO the foundation of Facebook (and mobile) with discoverability is so flawed that the market is closing, not opening, to developers to succeed with their creative game ideas.

Bisse Mayrakoira
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First time I hear anyone refer to cow clickers as "simulation".

Isn't there room for well-crafted experiences which make their money from selling actual content instead of pay-to-win or pay-to-remove-frustration - "games on Facebook" instead of "Facebook games"? Design optimized for non-whales? Short games which people come back to replay and recommend to friends because they liked it so much, instead of forced "retention"?

Serge Versille
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There is actually a company called pretty simple games that has made a great game in the hidden object genre, with everything coming together very well: story, art, gameplay, and tech (almost no loading times, and no sharing screens clutter). It's come out about a month ago and they're getting close to 200k DAUs, with an exponential rate of growth. They didn't do any ads at this point, but instead focused on delivering quality so that the new players would come back and in time invite their friends. Here's a more in-depth look: http://www.rudebaguette.com/2012/12/20/explosive-growth-for-fb-ga
me-criminal-case-without-ads/

Bruno Xavier
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I'm look at another chart right now where out of the top 20 games, 11 are zynga's shits.
This article can't really convince me there is a place for niche games on facebook.


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