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Tuesday, September 18, 2012

Making Games Social Outside Of Facebook

 Facebook has demonstrated how important   social elements and mechanics are for the success of a game within Facebook. The benefits are numerous resulting in higher traffic numbers, better retention and  lower cost of acquisition.

 Facebook has been the premiere social platform that most game publishers and developers have exploited to add social mechanics to their games. These mechanics have allowed games to access significant numbers of Facebook players leading to a number of games becoming very successful within the Facebook environment. This has resulted in a number of game publishers and developers becoming dominate within Facebook by exploiting the players they have acquired through Facebook in one game and moving them to other games in their game portfolio. 

However, there is a tax associated with launching and managing a game in Facebook if that game monetizes through virtual currency transactions. The fee is draconian taking 30% of all game transaction revenue and depositing in Facebook's account receivables.

Recently competition within Facebook for Facebook gamers has become so intense that the 30% Facebook tax is making it difficult for game publishers to be profitable within Facebook. Bottom line game revenue has been challenged because marketing costs are rising(Pay Per Click Advertising) and the required sophistication of games has increased resulting in  higher development costs for games.

Game  publishers have responded to this pressure by taking their games outside of Facebook and publishing them on mobile devices and even as web games. Until recently, these environments historically have not had native social mechanics to drive high traffic numbers without extensive advertising, partnerships and affiliate marketing relationships. 

With the introduction of Facebook "Connect" ironically Facebook itself has brought social mechanics to mobile and web games. Certainly it was not the  original intention of  Facebook Connect to enable game applications outside of Facebook to take advantage of its social mechanics without having to be in Facebook. However, game developers have cleverly figured out that they can get most of the social mechanics they need by adding Facebook connect to their games in mobile and web environments.

Game developers and publishers have added notifications, friend awareness, invites, Facebook pages, Facebook community development, etc to their non-Facebook games. There are certainly other less well know social game  platforms such as Gree that actually encourage the use of their social game platform to launch and promote games. However, given the size of the Facebook community Facebook is the obvious place to go to acquire players. I also suspect that Facebook is less then enthusiastic about how game developers and publishers are using Facebook connect to circumvent their virtual currency tax. However, not sure how they can avoid the exodus from Facebook by game publishers without impacting web sites and Facebook members with legitimate Facebook Connect  intentions.

Mobile games riding on top of  Facebook Connect is a powerful combination with more people accessing games from their mobile devices. This combination is actually making mobile games work from a business perspective.

We will have to see how Facebook reacts to increasing numbers of game publishers and developers exploiting Facebook Connect outside of Facebook.  

Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes  about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications.

1 comment:

Andy Rogers said...

Facebook have just changed their API to restrict the use of the social graph on off-canvas games (this excludes mobile and Zynga for the time being). Obviously this is to drive users and publishers back to Facebook in order to maintain ad income and revenue from the gaming sector.