The Social Gaming Motherlode

I’ve just wrapped up reading Dean Takahashi’s two part series ( Part I; Part II) on how social games are affecting the casual games business.

It’s a good read, and the numbers generated by some of the new casual game companies is astounding.

“Now, more than 37 million people are playing eight Playfish games on Facebook. There are about eight million daily active users. That’s a huge reach for a company that hasn’t even hit its two-year anniversary. The astounding part of the company’s track record is that all eight of its games have hit the top 20 on Facebook, which now has well over 14,000 games available.”

Thirty. Seven. Million. Players. World of Warcraft should be so lucky.

But is there money to be made?

There’s money to be made in them thar hills, too. The aforementioned Playfish is making money hand over fist (the numbers are in Dean’s article, so check them out.) Some of these young companies already have staggering revenues and profits.

That’s great if you’re the publisher of some of the popular games, but there are thousands of games of Facebook and My Space, and you know that many are simply languishing. It’s very much a gold rush mentality, and for every successful Zynga or Playfish, there are probably hundreds of games with few players and no revenues to speak of. Of course, most are also one or two-person shops doing it more for love than money.

The real question is whether social gaming will generate enough traction to be a long term phenomenon or eventually become a played out vein, as fickle users move on to the next fad. I can’t help thinking about the collectible card game craze of the 1990s. Spurred by the massive popularity and success of Magic: The Gathering, the CCG craze saw hundreds of games enter the market. Only a bare handful are left standing now.

On the other hand, social networking is a disruptive technology. Given that there’s little cost of goods, and that the revenue derives from advertising, not boxed (or even download) sales from end users, the barriers to entry are pretty small. Some enterprising company could come along and develop middleware that makes it easy for anyone to publish a game. Like blogging, we may see a time where almost anyone can build a game. (Of course, like blogging, most won’t be particularly good.)

The other thing I’ll be looking for will be ARGs (alternate reality games) built on social networking platforms. It’s a natural fit. Take apps like Facebook and any of a bazillion Twitter apps on smart phones, stir in built-in GPS capabilities and toss in some creative scripting, and you could see something like Mafia Wars have some component in the real world, as well as the online one. Of course, developers will need to take care to make sure that the real world and the game world don’t clash too realistically. Police may not take kindly to people that look like gang members or terrorists running around casing buildings. As any Vampire LARP palyer will tell you, the real world and the game don’t always coexist peacefully.