[LINK] Social gaming

[stephen at melbpc.org.au]

A virtual farm turns new ground for game developers

by John Gaudiosi, SAN FRANCISCO, Thu Mar 25, 2010  http://www.reuters.com


(Reuters) - A virtual farm attracting up to 83 million aspiring farmers 
monthly has video game developers scrambling to find ways to plough the 
booming popularity of online games on social networks.

Sites like Facebook, which has an estimated 400 million users, and 
MySpace, with about 100 million users, are driving a social gaming craze.

Heiko Hubertz, CEO of browser-based games portal www.Bigpoint.com which 
is home to over 100 million gamers, said online game experiences were 
very solitary in the past.

"Now through social network gaming and browser-based games portals, 
gamers of all types can share their experiences and compete against each 
other in original experiences like 'Poisonville,' as well as licensed 
content like the upcoming 'Battlestar Galactica Online,'" said Hubertz.

Once-small companies like Zynga, Bigpoint, Playdom, and Playfish, which 
Electronic Arts bought for $400 million last year, are finding 
exponential growth by creating free-to-play casual games that encourage 
players to get their friends involved.

This viral approach to gaming is introducing a whole new audience to 
videogames.

"The 800 pound gorilla in social games is Zynga's 'FarmVille,' which has 
over 82 million people worldwide playing at least once a month and over 
32 million people playing daily," said Justin Davis, founder and editor 
of www.SocialGameCentral.com

"FarmVille," which has been available as an application on Facebook since 
June last year, involves managing a virtual farm by planting, growing and 
harvesting crops and raising livestock.

Zynga, which has created five of the 10 most popular social games, also 
attracts an audience of 30 million monthly and 9 million daily with "Cafe 
World," its second most popular game.

Davis said overall Zynga has over 230 million active players across 
multiple social networks.

Even MySpace, which announced a new MySpace Games experience at this 
month's conference aiming to encourage game makers to cater to its online 
audience, can attract over 10 million players with games like 
Playdom's "Mobsters" and Zynga's "Mafia Wars."

About one-third of MySpace users currently play games.

STRONG GROWTH FORECAST

Michael Pachter, videogame analyst for Wedbush Morgan Securities, said 
social gaming has grown from around $600 million in total revenue in 2008 
to $1 billion in 2009 and expects social gaming to bring in around $1.6 
billion this year.

"The growth rate should remain very high at around 40 percent each of the 
next three years, so my guess at 2011 is around $2.2 billion, 2012 at $3 
billion 2013 at more than $4 billion," said Pachter.

While most of this gaming revenue is currently focused on the sale of 
virtual in-game items, called micro-transactions, Pachter forecasts there 
will be more advertising revenue and data mining in the future.

Game developers are introducing new technologies that could help grow 
social games even further.

Vivox, which provides voice chat services for massively multi-player 
online games like Nexon's "Combat Arms" and CCP Games' "EVE Online," is 
working with developer Hive7 to allow Facebook gamers to talk to one 
another while playing titles like the medieval strategy game "Knighthood."

"People will be able to play social games as if they were at the same 
table," said Rob Seaver, CEO of Vivox.

Traditional game companies like Activision Blizzard and Sony Computer 
Entertainment are connecting console games with social networks like 
FaceBook and micro-blogging site Twitter where users can send 140-
character messages called "tweets."

Activision Blizzard's upcoming racing game, "Blur," will automatically 
write tweets for gamers to send to friends as they unlock achievements.

Sony announced at this month's conference that its virtual world, 
PlayStation Home, which has over 12 million users, will offer more 
interaction with FaceBook, including notifying players of turn-based 
games like chess when it's their next move.

"I love incorporating my latest achievements on Xbox 360 games 
like 'BioShock 2' and trophies on PlayStation 3 games like 'Uncharted 2' 
with my Facebook and Twitter," said Raychul Moore, host for videogame 
site www.Gamerlive.tv

"It allows me to take my love of achievements one step further and share 
my accomplishments with a much wider group of friends."

It's that kind of connected experience that leads David Cole, president 
of DFC Intelligence, to forecast that the total free-to-play market 
worldwide excluding Asia will grow from $1 billion in 2009 to over $3 
billion in 2013.

"The big challenge in 2010 and beyond will be in enhancing gameplay," 
said Cole.

(Editing by Belinda Goldsmith)


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