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Are social games on Facebook really dying out? Exclusive
Are social games on Facebook really dying out?
April 18, 2013 | By Mike Rose

April 18, 2013 | By Mike Rose
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    14 comments
More: Social/Online, Business/Marketing, Exclusive



This week could prove quite the turning point for browser-based social games, especially where Facebook is concerned.

First Electronic Arts said that it is pulling its most popular games from Facebook, raising questions over whether it plans to shut down its Playfish social games subsidiary.

Then figures from metrics tracking firm SuperData showed that last month, the social games segment reached a new low of $124 million in total revenue. The social games space is holding back the overall digital space, says the company.

But has this week been the final nail in the coffin for the social games space, or has it simply opened up the floor for a host of new developers to try their luck?

Facebook, expectedly, reckons it's the latter. "One developer shifting resources or moving a game does not speak to the health of the ecosystem," Facebook's technology communications manager Tera Randall tells me, "the same way a console game maker pulling a game off a store shelf doesn't mean that the store is having problems."

She continues, "It's a natural progression that's not unique to social games and one we've always seen as people move from one hit to another, or focus on a new franchise."

Stats shared with Gamasutra earlier this week back up Randall's statements to a point, and she says that following EA's cutting back of its support for social games, Facebook is "not at all worried about an exodus."

"It's important to note as well that if/when developers invest more in mobile (as we also have with our own apps), the vast majority use Facebook as the cross-platform identity system, as well as one of the primary ways to drive app discovery through News Feed, App Center, and our new mobile app install ads," she adds.

Social devs speak

Talking to the platform holder is all well-and-good, but Facebook was always going to say that everything is hunky dory. The real test is whether social game developers still feel like it's a space worth sticking with.

UK-based Playdemic has seen great success with social games in recent months, as its Facebook and Zynga.com game Village Life has around 2 million daily active users.

Notably, according to data from AppData, the game has between 100,000 - 500,000 DAUs on Facebook, thus the majority of Village Life's players must be from Zynga.com, as part of Zynga's incentivized cross-promotion efforts.

village life.jpg"I think we need to be careful here to distinguish between EA closing game services which they no longer feel are viable, and the overall health of the Facebook games platform," states Paul Gouge, CEO at Playdemic.

"An inevitable consequence of the Social Game Service business model is that, at some point, the service will become uneconomic for the publisher," he continues. "This is the point at which the monthly revenues generated simply aren't sufficient to justify the costs associated with running the game."

With the games industry embracing the "games as a service" philosophy in recent times, Gouge believes that revenues no longer justifying costs "is going to become a much more frequent occurrence regardless of platform and something that, as an industry, we need to ensure we are able to manage in a way that is the best it can be for our players."

It will also become something that gamers actually begin to anticipate with their games, he reasons. "As for the Facebook games platform, whilst there have been significant changes we still see it as a viable and exciting platform for publishing games and if you look at the $2.8 billion in revenue spent in games on Facebook in 2012, players would seem to agree."

What Gouge sees isn't a decline in the number of players who are willing to play social games, but rather, an industry that is fickle and prone to changing its mind about what's hot and what's not much too frequently.

"What worries me is that as an industry we are good at having huge collective mood swings about platforms, business models and genres," he says. "Only 2-3 years ago Facebook gaming was being hailed as the greatest opportunity in the industry and now the collective conscious seems to be ready to throw it out as a bad idea."

"The truth as always is somewhere in the middle," he continues. "Facebook is still an important platform for casual and social games and its power in enabling both discovery and engagement of players on desktop and mobile will be with us for a while yet."

Of course, even with all this talk, it's difficult to look past the fact that a number of big companies like Zynga and EA are still pulling away from Facebook. Gouge believes this is down to the nature of Facebook as a platform for multiple outlets and not just games.

"Facebook is a constantly changing animal, and as games are not its prime offering some of the changes are good for game makers and some bad," he explains. "As a result this means that those companies hoping to get a share of the $2.8 billion being spent on the platform need to dynamically respond to the changing nature of the platform to succeed."

Pretty Simple Games is another studio that is having success on Facebook. Its hidden object game Criminal Case currently has over 4 million DAUs, and the company's head of communication Serge Versille is baffled by EA distancing itself from social games.

"EA has some big successes, and it's hard to believe they'd just throw away the millions of DAUs," he notes.

"But EA isn't a market leader, and in Europe alone, big studios like King or smaller ones like Social Point or Pretty Simple are showing objectively that there are opportunities for growth and success," he adds. "So as it stands, we're seeing this as an opportunity to entertain casual players who will no longer be able to play EA's games."

criminal case.jpgHis experience with the social games space is that tight integration with Facebook's features is the key to success on the platform.

Notes Versille, "As our co-founder Bastien Cazenave was quoted a month ago, when he was talking about going from 0 to 3M DAUs in the first 3 months since releasing the game, 'The success of Pretty Simple with Criminal Case shows that Facebook remains the best performing online platform in order to reach such an audience in such a short time."

Elsewhere, Serbian game developer Nordeus has one of the most popular games on Facebook, football manager game Top Eleven. CEO Branko Milutinovic notes that these kinds of shutdowns from big publishers aren't uncommon in the social games space, and that's likely to never change.

"Online games require servers that cost, and when the game stops being profitable, the company will eventually shut it down," he says. "Other big publishers, not just EA, closed dozen of games in 2012, not to mention previous years."

However, Milutinovic admits that he has noticed a recent momentum in the space, with more big titles shutting down on Facebook than usual.

"I believe that both the media and the industry are experiencing a bit of a shock that these big publishers with big IPs have failed," he reasons, "and that news is generating quite much buzz in the media right now."

From what Milutinovic can tell, it appears to be a problem of monetization, rather than a drop-off of players in the space. "We closely monitor developments with every single publisher in the social gaming sphere, and as far as we are concerned, the biggest problem with publishing companies these days is not knowing your audience and not listening to gamers' requests and needs," he says.

"Being the well-known company with the big budget and licences just isn't enough, and we could all witness that in the case of EA FIFA Superstars vs Top Eleven. Superstars has shut down last month and Top Eleven is the number one sports game with over 10 million active players today."

As a result, Nordeus isn't concerned about EA's decision to move away from social games, or indeed, about what any of the larger publishers are doing.

Big hitters and mobile transitions

SuperData's report from earlier this week suggested that while the larger companies are dropping away from Facebook, this may leave space for smaller and medium-sized companies to take up the empty space from the departures.

However, the larger companies that we talked to didn't appear all too bothered about EA's downsizing. Wooga currently holds a number of the top games on Facebook in terms of MAUs, including Diamond Dash (pictured) and Bubble Island, and the company's founder and CEO Jens Begemann told me that "EA downsizing on the platform is not cause for any concern."

"Like any big platform, Facebook.com is extremely competitive," he added. "Probably a big difference between the platform and consoles is that big brands tend to matter less. To be successful you need to create the best games with the best user experience and continually iterate upon that. That's an approach that has helped us grow these games over years."

Elsewhere, King CMO Alex Dale noted that his company currently has over 108 million monthly players, while King has found that players who connect with games on both mobile and social platforms are generally the most engaged.

candy crush saga.jpgIndeed, King currently has three of the top 20 games on Facebook, including Facebook's top game Candy Crush Saga. In total, the company has six games in the top 100 rankings based on MAUs.

However, Dale chose not to comment specifically on how he sees EA's move this week affecting the platform.

Notably, each of the companies that I talked to also has a mobile games presence -- and each was keen to stress that it has no plans to abandon social games in favor of mobile, as many industry people believe is currently the case.

Playdemic, for example, says that Facebook games can aid companies in discovery and engagement of mobile titles, while Nordeus says it has always been about cross-platform games, hence a focus on both Facebook and mobile will remain - at least for the foreseeable future.

Despite the fact that Wooga holds a number of the biggest games on Facebook, it is a mobile first company with its focus firmly set on iOS. However, the studio does have a number of Facebook games planned for later this year that it hasn't yet revealed, and it says that Facebook will continue to play a big role in its future releases.

And Pretty Simple Games sees the two platforms going hand-in-hand, especially considering Facebook's latest mobile games features such as the games feed on iOS. The developer is currently adapting Criminal Case for tablets, with Facebook integration in mind.

Social games revenue may be way down compared to at its peak a few years ago, but there are still plenty of developers who believe that there's room to not just survive, but prosper in the space. No doubt the remainder of 2013 will show us exactly where social games are headed.


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Comments


Ramin Shokrizade
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Facebook was never a strong *gaming* platform, it has always been (and still is) an awesome marketing platform. What Facebook did bring us, in terms of games, was games for women. While the number of women that play games is close to the number of men that play games, there were very few products on the market that appealed to them before Facebook games took off.

What is killing Facebook now is a total disconnect between developers and consumers, which I attribute to poor business models created by non-gamers.

In that same vein I must point out that we are not talking about social games here. We are talking about anti-social games on social networks. Once we start making social games for social networks, this space will explode anew.

Carlo Delallana
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"What is killing Facebook now is a total disconnect between developers and consumers, which I attribute to poor business models created by non-gamers."

I'd love to get some more paragraphs out of you regarding this comment. I do wonder about this disconnect you mention. When people spend a lot of time looking at analytics dashboards and not giving an equal amount of time with community management and melding these two datapoints it's not surprising that you lose sight of the people behind the data.

"In that same vein I must point out that we are not talking about social games here. We are talking about anti-social games on social networks. Once we start making social games for social networks, this space will explode anew."

Again, i'd love to get some more insights into what a real social game is as opposed to an anti-social game. We know that in the early days of social the designs tend to promote and monetize from player weakness and negative emotions. There was even a brazen GDC session from someone at Ubisoft Blue Byte who advocated the exploitation of said human weakness (http://bit.ly/b4GnQx).

Exploitation only occurs when you have dehumanized the victim because there is no way for empathy to kick in. To think that someone from the games industry would advocate for this is kind of sickening. What really troubles me is the lack of examples of how to combat the reliance on "designing for human weakness" that yields the same level of financial success as games that employ exploitative design. But maybe that metric is flawed, maybe we can't expect a game that doesn't exploit to monetize as well as a game that does.

Erik Carpenter
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@Carlo I think you might be taking the use of "Exploitation" too literally and the person who it originated from probably could have use "capitalization" in that instance. Recognizing that humans have an impulse for greed competition and egoism and utilizing those character flaws in your game to make the target demographic obsess about your product. That is one approach. Another approach is to capitalize on the human impulses for adventure, exploration and wonderment. Miyamoto and Nintendo do this quite well. It really all depends what kind of game you are developing and who the target demographic for the end product is.

Erin OConnor
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"What is killing Facebook now is a total disconnect between developers and consumers, which I attribute to poor business models created by non-gamers."

Company A- "This is a great opportunity for us to create a great social gaming experience for people [not gamers] to enjoy"

Company B- "Our game is played by millions and look at all the money we are making via in-app-purchases."

Company C- "Look at all the money company A and B are making. We want in on that too. Our accountants say this is the game we should make to maximize our profit. Here is what we are going to sell and people will buy it because we made it according to the accountants maximum profit spreadsheet, not because its a great game/social experience that people want."

Later on:

Company C- "I do not understand why our game is not doing well. We followed our accountants development plan and the number said..."

Jorge Ramos
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@Erin

Funny thing is, Nostalgia Critic touched on that very issue to a tee with his most recent video reviewing the awful Cat in the Hat movie, and how there are people in these companies who simply cannot see anything beyond some data on a chart or what some "focus groups" (read: paid surveys) basically tell them to think and suggest, completely disregarding whatever the original intent or vision of the product might have been.

I'm willing to bet that a lot of the current crop of "Facebook games" did not start out the way they ended up, but simply ended up that way because some bean counters saw some trends and hoped to ape the (apparent) success.

David Paris
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I love the description of these chaff as 'anti-social games' because I think you are dead on. Games that cause you to be a nuisance to your friends are not improving your social interactions, they are worsening them.
rn
rnA game that you play with your friends by choice, laugh over, and tell stories of later is a social game. Magicka, most MMOs, Castle Crushers, etc... these are social games.
rn
rnGames that force you to spam your friends with their garbage. These are a blight on the industry.

Ramin Shokrizade
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I could go on and on in detail about this subject, but I already have. I have 30 papers on Gameful.org that answer all of the questions posted here, including my July 2011 "Zynga Analysis" that predicted in detail the FB implosion (http://gameful.org/group/games-for-change/forum/topics/zynga-anal
ysis-1).

I also write on these subjects for Gamasutra so feel free to keep an eye out for my articles.

I would just like to add that there is nothing wrong with analyzing consumers to find out what they want. I just think that to do so you have to use a multidisciplined approach (I use neuroendocrinology, game theory, behavioral economics, and game domain expertise). Just looking at game analytics is a very primitive and ghetto approach. If that is all you got, then it is no surprise your game feels like it was ripped straight from Excel.

Bob Johnson
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I would love to see revenue and profits instead of DAUs.

Anyway FB gaming seems like such a nickel and dime business. Come up with little time wasters that are cute and get FB'ers to send a few links to friends. They have a few little laughs about the game while talking about life and looking at photos. Then 1 out of 100 spend a few nickels to buy some dumb virtual boots to giggle about. And a small percentage of those folks have a secret addiction and are out of control like a fat housewife with a secret candy stash or a 5 yr old with Mom's iPHone with in-app purchases enabled. This whole scheme works for awhile but within a year or two it goes out of business. Collapses. The novelty is gone. And you need to have new little scheme in the works ready to go that can fool folks and dredge up victims er customers for another year or two.

It does seem like it levels out and declines once word has gotten around enough that these things are just cash suckers. There still will be new victims I mean customers because there will new schemes or old schemes with new wallpaper that look like new schemes to entice the unaware or vulnerable.

Sana Choudary
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.

Joe McGinn
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Don't think it's dying, just a reality check. Gaming on FB is a time-wasting activity, nothing more and nothing ... well, sometimes less. So this concept of spending millions for *high production value* time wasters like The Sims was questionable. Candy Crush Saga is a "good" FB game (good in that it does exactly what that audience wants, and is not an expensive game to develop).

Bruno Xavier
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These devs have no choice but making money-sucking games.
Server costs for a FB game may be unpredictable and atrocious amount of money leaving their pockets.
Millions DAUs is no small bill they have to pay for, if they wish to keep their game running.

Ben Sly
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The gold rush is falling apart, but that doesn't mean that gold mining will stop.

Andreas Ahlborn
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If you consider the fatigue even dedicated fans develop for their brands if they never get a rest from the market but are annually pushed into the releasecycle (cod, assassins creed) its a wonder that the casual gamers could hold their mental puke for as long as they did.
I mean, how many "Bejeeweled,Temple Run, AngryBirds, BubbleWitchSAga, Farmville"-clones can you stand until you get dizzy?

Joshua Darlington
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The social density and social graph technology of Facebook offers a big opportunity for unlocking energetic ambient entertainment through social collision and etc. Social games should be people centric and should enhance, encourage, and explode full spectrum people to people dynamics. The development of real social graph based games has yet to begin.


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