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Tech Talk, Developer Tips & Press Releases from 49 Research

What Is Social Gaming

July 30, 2010

If you make regular use of the Web, then chances are you have already heard of social gaming.

At first look, social gaming just seems like games on Facebook. And while there is some truth to this at this point in time, thinking of it as just "games on Facebook" does not truly capture what it really is, or what it is likely to evolve into. (I.e., social gaming will likely go far far beyond Facebook.)

From the point-of-view of the game developer -- the people and companies who create games -- social gaming gives them access to an alternate method of advertising and promotion. (And often at lower cost as compared to traditional methods of online advertising and promotion.) By encouraging and "nudging" their users to get their friends to also play the game, by utilizing their "friend connections" on social networks, game developers can increase user base. And, for a game developer, increasing their user bases tends to translate into increasing revenues.

For the point-of-view of the game player -- of the user -- social games allow them to be social while they are being entertained. One of the large demographics that plays games online are middle age moms. This demographic seems to enjoy being social by chatting with others, by sharing information about themselves and their lives, and by including a peer group while they are "unwinding". Any online game that targets this demographic should include facilities for allowing these type of activities. But of course, this isn't the only demographic that plays social games. And gearing a game to other demographics, like young males, requires different strategies.

Looking at the industry as it is now, the social gaming space, and in particular social gaming on Facebook, has become an emerging billion dollar industry. Large social gaming developers such as Zynga, Playdom, and Electronic Arts as well as a "zoo" of smaller social game development companies (such as 49 Play) are driving and fueling the growth of social media giant Facebook, with others such as MySpace, hi5, and others looking to also capture a portion of this industry.

Monetization of these games comes in many forms, but often revolve around virtual currencies. One avenue for this montization is the usage in-game online ad space sold via a CPA business model. Conversions from these online ads results in virtual currencies being awarded to the game player. (Which can be used by the game player to purchase virtual goods and other items.)

The future of social gaming seems to be pushing into the mobile phone space. Bringing in new technologies, such as location based gaming, making use of GPS location information from satellites, to bring a new level of experience in the game play. It also seems probable that future social gaming may also incorporate augmented reality, with virtual objects being overlaid onto the real world.

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