Wait for It…

More news coming soon (no, I haven’t died or lost the keys to this place).  We’ve been working hard on a couple of very spiffy things and we’ll be saying a lot more about them  shortly. Sometimes not saying something too soon about what you’re working on is one of the most difficult things about this business.

In the meantime, have a look at this terrific image from an upcoming app of ours, or read this very insightful article by Trip Hawkins, CEO of Digital Chocolate, about using the wealth of publicly available information we have to assess the health of social games and social games companies.

We really do live in a time of unprecedented change in the games industry: faster development cycles, much closer relationship with the customers, much more resilient revenue models, incredible metrics and marketing tools, and — I hope — the ability to create new kinds of games on that foundation.

 

The Early Game

I’ve talked a bit here about the need for depth in social games — the need for an elder game that keeps you playing after you’ve grasped the primary gameplay.  This need is showing up in the “dangerous curves” we’re seeing in many of the first-gen social games topping out and drifting downward as people tire of the same-old gameplay.  There’s no doubt that it’s important to “avoid the VOID” in game design — where VOID is Varies Only In Difficulty (coined by Dan Arey, I believe).  In other words, if all you do is dial up the difficulty as the game moves along, it gets boring pretty quickly.

But on the other end — the nearer end, the one you have to get through to be able to worry about an elder game — things are heating up too.

Is Facebook Strangling the Golden Geese?

Facebook is in the process of introducing Facebook Credits, its entry into the burgeoning ecommerce/virtual currency area.  Given that Facebook is the prime destination for people playing social games, this is hardly surprising.   However, in so doing, is it in danger of driving away the sources of its fast-rising revenue?   Is Facebook strangling the geese that lay its golden eggs?

Dangerous Curves and Social Games 2.0

I’ve written here a few times about the business model for social games and why I think this is a very good area to be working in.  I continue to believe this is a large market in its early stages, with more people spending more on virtual goods in the past year, and with  at least one recent study predicting incredible revenue growth over the next few years. We’ve all seen the meteoric rise in this sector in the past couple of years, both at the top end in Zynga, Playdom, and Playfish (now EA), and in the medium-size and long-tail developers.

But recently, some of the shine seems to have come off this area. This is most clearly seen in the dropping MAU and DAU in the top social games — Farmville for example has dropped from a high of about 83M MAU in March to 66M today.   66M is still a number that no one else can touch, but it’s also a huge drop in a game that had been rising steadily.

And it’s not just Farmville.  If you look at the graphs for the top games that have been around for a while, rising continually (e.g., Texas HoldEm, Cafe World, Pet Society), each shows a peak and a subsequent fall-off.   Notably, this isn’t just due to the age of the game: some more recent games like Treasure Isle and Hotel City show the same dangerous curve at around the same time, even though they haven’t been around as long.  Some like Nightclub City show a rising MAU curve — but a daily users curve that has peaked, indicating that the trailing MAU indicator will show this soon too.  Still others, despite strong PR-backed launches in what seemed like good areas, have fared much worse from the start (indicating among other things how critical repeat play is to the success of these games).

So other than the fact that simply putting out a social game isn’t a license to print money, what does this mean?

The New Social Grind: Begging as Gameplay

Zynga recently came out with its latest “social” game, Frontierville.  It features the same cartoony art style and single-player gameplay as their previous games, and reportedly combines elements of others including Farmville in a new skin.

Another thing it does is hone the concept of what I’ve called “ugly viral” — in this case, using begging as gameplay.  Not only does this game make it impossible for you to move forward without others helping you — in a way that involves no social interaction at all —  it’s very up front about this as the poor li’l teary-eyed supplicating pioneer in the illustration (from the FB feed) shows.

So what’s wrong with this?  It’s all in good fun, and it’s cute, right?  Well, maybe.

A History of Social Games

Over on his blog, Jon Radoff provides a terrific map of the history of social games.  Really worth looking over.  He starts with ancient times and wends his way down to the present (leaving out many games, even some seminal ones, but still catching the main currents).

What I’m most interested in is where we are now and (of course) what’s next.  Jon’s brief taxonomy separates current social games into Strategy, Sim, RPG, and “experiences” (music, pets, etc.). Not a bad set of categories.   I’m particularly interested in the potentially convergent growth of RPGs (Mafia Wars, etc.) and Sim games (Farmtown, Social City), and whether both can interweave well with some kinds of strategy games.  Are these kinds of games sufficiently social that as they evolve they can support hybrids and cross-overs, or are we more or less stuck with these genres?

Ugly Viral vs. Pretty Viral

Recently I encountered yet another app on Facebook that required me to “become a fan” and install the app before I could even see what it was, much less whether I liked it enough to become a real fan.

Sorry, no.

That’s not viral except in the meanest, ugliest sense.  Like Ebola.  I saw a friend of mine — a trusted source of information — who ostensibly was a fan of this app.  So I clicked on it.  But when I saw the app’s reputation-extortion scheme, I surfed away, and wondered a bit about my friend.

This is only the most recent smarmy way that app developers have tried to extract virality from their users.  There are good ways and not so good ways to do this.  Why do developers persist in using techniques that fall into the doing “every horrible thing” category?  Isn’t there a better way to go about acquiring customers by social means?

The (Psychological) Development of “Social” Games

At GDC this year I saw a slide in a talk that referenced different developmental styles of play (my notes are sadly unclear as to whose talk this was — if you know, please let me know!).  This has had me thinking about the developmental stages of social games.  Not the software development, but the evolution of the styles of gameplay we put in them as we learn more about creating them.

It should be clear to anyone watching this space that game developers are learning as fast as they can about how to create new gameplay in online (putatively) social games; we know a lot less than we still don’t know.  As such, it’s very interesting to me how closely the emergence of types of gameplay in popular social games is following the path of individual psychological development of play — and what this may tell us about the future of the design of social games.  

Better Revenue Forecasting for Social Games

One of the great things about social games is that there continues to be a wealth of information available that makes their business case much less uncertain than for other kinds of games.

As one example, Lisa Marino, Chief Revenue Officer at RockYou, gave a presentation at GDC on Monetizing Social Games that’s well worth reviewing.  Lots of good stuff in her slides, and in particular she provides some fascinating data on daily revenue per DAU.  This is a much more precise set of numbers than monthly revenue per MAU.  Measuring per DAU allows for better accounting of the initial fast rise of most successful social games (when DAU can be a very high percentage of MAU), ongoing engagement (how often your players return), churn, long-term drop-off, etc.  

One Winner or Many? How the Business of Social Games May Be Differently Different

In a recent Technorati post, “The End of Social Gaming As We Know it?” there’s an interesting quote from Keny Yager at MorrisAnderson: “I think we are still in the wild, wild west of the social media experiment. There is going to be one winner and 100 losers.”

I hear this kind of thing a lot.  The first part is certainly true; the games industry is in a period of fast expansion and evolution — breathtaking even for an industry used to rapid change.  The second part seems to be based on a lot of industry history, where there’s typically been a king-of-the-hill reality: for those games depending on retail sales, the top few make all the money, and the rest go begging.  In MMOs, there was a broader base – at least prior to World of Warcraft, back when crossing the 100K player gap meant you were successful.

But there’s good evidence that social games (as a broad category) are different right down to the structure of the marketplace – they’re not just different as games, they’re differently different, requiring a new way of looking at design, development, production, funding, customer relationships, and overall commercial success.  If you look at social games developers from the point of view of a standard (venture) investor, then there are likely to be one or a few big winners – companies with billion dollar valuations.  But that misses most of the picture, like the proverbial iceberg.