Ronnie05's Blog

New Revenue Models Augments Social Gaming.

Posted in Gaming by Manas Ganguly on October 7, 2011

India’s gaming industry is set to grow from Rs 4 billion in 2007 to a projected Rs 14 billion in 2011. India’s Social Gaming Revenues would top $1B in 2011.

Social gaming already is big business in Facebook and the top social gaming companies are making anywhere from $60 million to $ 1 billion per year on Facebook Games.

The stickiness and the traffic generated by Facebook games is the engine driving the social games economy

Of the 33 million Indians registered on Facebook (these form a third of the India’s internet population), an estimated 40% indulge in Social Gaming. That’s 13.2 million Indian’s engaging on Facebook as a portal. And a large and influential mass of people to be discounting for any brand based activity. Interestingly enough, Entertainment related brands which are more relevant to digital media are beginning to make their presence on Facebook. Two interesting instances are

1. Launch of Don2, the social game on Facebook in parallel with the Don2 movie featuring Shahrukh Khan, Priyanka Chopra, Lara Dutta, Kunal Kapoor amongst others. To leverage on the huge popularity of SRK, and the legacy of the Don movies, the Don2 game involves dark and gritty 2D art style gaming with Photo-realistic representations of locations, characters from the movie, weapons and vehicles, Interactive mini-games with multi-layer gaming to unlock special items, weapons and missions with friends, Leader-board system, Global and social ranking. The games include Real and virtual goods received as gifts which could be used as virtual and real monies. The gaming model closely resembles a mash up of Cityville and Mafia Wars. In the true social essence the initial draws will be based upon Facebook Ads, post which the viral effect kicks in, which is fortified with awards and other meet and greet events.

2. Another global launch that is also being worked out through Facebook is the launch of Enrique Iglesias’s new Album through context relevant advertising through the Facebook’s No.1 game: Cityville. The effort is to drive traffic to the Album’s facebook page including the exclusive video and audio snippets of the album’s numbers. That’s a seamless way of integrating awareness, trial, likes and recommendations about Enrique’s new album across 73 million monthly users of Cityville. Earlier we had Lady Gaga’s Gagaville lord over Farmville for the same set of purposes.

These events are particularly interesting as means through which Social Games are evolving from just being a game to a engagement-led and experiential media for brands to talk to its customers. There would be more such integrations as we go forward. If at all, this medium underscores the importance of traffic and stickiness as pre-cursors to revenue generation mechanisms.

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Social redefines the gaming domain

Posted in Gaming by Manas Ganguly on November 23, 2010

Zynga’s m-Cap ($5.51 billion) has reportedly edged Electronics Arts’ m-Cap ($5.22 billion) in NASDAQ a month back. Zynga, maker of Farmville is remembered for its contribution to social gaming and analysts in bouts of enthusiasm have called it “Google of social games”. EA’s identity on the other hand is more of a traditional videogame giant with blockbusters like FIFA.

So then, is this the rise of one social game startup over the fall of a traditional videogame giant? Not quite. This is not about social versus traditional anymore. Instead, let’s look at this match-up as competitors battling it out across new platforms.

EA has been aggressively expanding into new gaming territory, including social. The company bought startup Playfish, then the second-largest social games developer, in November 2009 for around $400 million. The course of transitioning out of being a traditional console game publisher hasn’t been easy for the company and it has been rocked by declining profits, share value and layoffs. Inspite of the fact that turnarounds take time, and EA’s online revenues are looking pretty good. This fiscal year, EA expects its digital businesses — including mobile, downloadable games and social games — to reach $750 million, or about 20% of total revenue. That’s about the same, if not more, than what Zynga’s total revenue is estimated as. And that’s not to mention EA’s more than $3 billion in revenue from console and PC game sales.
Impressed by the success of Zynga and Facebook, virtually all of the major traditional game publishers have begun incorporating social games or elements into their products. In effect, everyone in the industry has become “social”. Seen through this longer-term lens, the competition among these companies will ultimately come down to what it always come down to — who has the better games.

The social games business is a hits-driven one, because players flock to whatever game is new and popular at the time.
That’s still as true now as it ever was. Zynga clearly has a lead in social games with its popular FarmVille title. But even that hit is on the decline in terms of number of users, down more than 25% since its peak. It is very possible we may never see a social game with as many users as FarmVille again because the market is fast fragmenting.

Smaller audiences in games aren’t necessarily a bad thing. A game like FarmVille may have all the users, but the average spend per user per month is low, around 10 to 20 cents. But a social game under an IP that commands a smaller but more loyal user base, like EA’s FIFA Superstars, can see an average as high as 50 cents to $1. And EA has a number of traditionally strong franchises under its roof that it’s been rolling out onto Facebook.

Meanwhile, both companies know that social alone isn’t enough either. It’s about having an entertaining game experience that exists across multiple platforms. To that end, both have been pushing out mobile titles and making acquisitions of mobile game developers. EA, for instance, just bought the Chillingo, the publisher of the popular iPhone game Angry Birds, last week. (Though the purchase did not include rights to the game, which belong to its developer Rovio.) And Zynga bought iPhone developer Bonfire Studios, earlier this month. The company also recently released FarmVille for the iPad.
Zynga has certainly been a rocket-ship of success, achieving what it has in just four years. But that doesn’t mean social gaming is poised to capture the larger market. Instead, Zynga’s success has brought the company to a new level of competition that’s not social — it’s about the games.
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Zynga: The advent of social Gaming

Posted in Gaming by Manas Ganguly on September 28, 2010

Zynga is to Social gaming what Google and Facebook are to Search and Social networking. In partnership with Facebook, Zynga has metamorphosed into the largest internet social gaming platform. Facebook and Zynga have a symbiotic relationship. While Facebook provides Zynga the scale in terms of its 500 million account holders, Zynga provides the stickiness to Facebook usage. Together, Facebook and Zynga are now instrumental in staging out the first global virtual currency, the Facebook Credits. Zynga, based in San Francisco, is the largest maker of games on Facebook, and is expected to record revenue of as much as $500 million this year, according to Inside Network. Zynga has more than 200 million monthly active users, with between 1 percent and 3 percent paying for virtual items.

In a Tech Crunch event, Disrupt, Internet Evangelist and Investor, Bing Gordon, who founded gaming giant Electronic Arts prior to joining KPCB, recalled what made him think that Zynga would be a massive success. Gordon said that, years ago, he anticipated that there would be four disruptive trends in the game industry: social, analytics, an “APIable Internet” (app economy), and new payment methods. But he’d previously thought of each of these as separate entities, not something that would be combined into a single company. Then he saw what Mark Pincus was onto with Zynga — which he says combined these “four disruptions in one”.

Mark Pincus, CEO Zynga, in the same event, stated that Zynga is still far from being an Internet treasure, at least in the way he defines one. The way he defines an internet treasure is about adding a new meaning to the “daily grind” of the lives of the users. I suspect if that be the statement, Pincus has more on his mind then just the farming games to “add a new meaning to the daily grind of the lives of the users”.

As of Today, Zynga is a part of a new concept that is starting to take wings: Virtal Goods. The U.S. virtual-goods market may grow more than 30 percent in 2011 as games on consoles and mobile devices replicate the success of applications on Facebook Inc. The market will jump to $2.1 billion next year from $1.6 billion in 2010 and $1.1 billion in 2009, as quoted by Inside Network. Companies such as Nintendo and Ngcomo are following suit after Zynga added the new dimension to virtual goods on social games. The objective is to get more and more engaged users into paying for virtual goods. Social Gaming now accounts 40% of the virtual goods market with Zynga, Electronic Arts and Walt Disney Co making up half of the social gaming market for next year.

Online Gaming In India
Online gaming in India is rapidly expanding. Forty one percent of active Internet users played online games in 2008, up 89 percent from the previous year, according to the Internet & Mobile Association of India. With more than 81 million Internet users, India is projected to become the third largest online market behind China and the U.S. by 2013.