Video: Social Gaming Executives Predict the Future of the Industry in 2010

What will be the most significant changes in social gaming this year? We joined a panel of social gaming executives last night at a packed event in the Googleplex in Mountain View, California to discuss. Our overall conclusion? We’re mostly quite optimistic. Check out the video to watch us make our predictions.

We also got a chance to hear from product leaders at Orkut, the Google-owned social network that’s big in Brazil and India. While the site is facing competition from Facebook and other services, like Twitter, it continues to be a big and under-appreciated opportunity for social game developers. It has 80 million monthly active users, the single largest majority of whom are between 18 and 24 years of age. While a range of your usual range of games have gotten big on Orkut’s developer platform — farming, aquarium care, etc. — there are only a few of them. As competition increases on Facebook, Orkut can be a good place for companies to gain additional traction, experience and revenue.

Here are the prediction panelists:

– Daniel James, Co-founder and CEO, Three Rings
– Wilson Kriegel, VP of Business Development and Ad Sales, Outspark
– Lisa Marino, Chief Revenue Officer, RockYou
– Mark Rose, Director of Product, Payments and Platform, Playspan
– Jonathan Flesher, VP of Business Development, Zynga
– Eric Eldon, Editor, Inside Social Games

Ali Moiz, chief operating officer at social market research and monetization company Peanut Labs, moderated the panel. We didn’t get a chance to hear his predictions at the event, so he’s provided them to us, below.

1. Non-premium apps that generate “viral” traffic and make money largely off display ads will take a big hit as a category. There will be individual apps who figure out how to go viral, but in aggregate this category will decline atleast 25% in terms of MAUs.

2. Social games will be affected as well, though not as much as 1 since they can compensate through ad-spending and a higher % of returning users. Competition will heat up since there are less free/viral users to go around. Ad spend and user acquisition rates will increase, rewarding those developers with deeper content that monetizes better.

3. Friend app invites/requests will become largely ineffective. Their proposed placement according to current FB screenshots means they will be checked as frequently by users as “Updates” currently are in the Inbox, i.e. almost never. Expect this viral channel to become ineffective compared to today.

4. Developers will spam email en-masse in desperation, resulting in that channel becoming useless and ignored. Relevant email updates will likely get drowned out by email spam generated by other apps. Already there are email providers offering to “sell” Facebook emails collected from apps. I’ve been pitched rates of $150 per 1 million verified FB emails by 3rd-party vendors. At those rates, there will be massive spam flooding the system next month via email.

5. The newsfeed will be the main viral channel left for most apps. Apps will genuinely have to push out more relevant and highly engaging content to get exposure. Current newsfeed spam methods will become less effective when everyone starts spamming the newsfeed next month.

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Leave a Reply

10 Responses to “Video: Social Gaming Executives Predict the Future of the Industry in 2010”

  1. Tadhg Kelly says:

    Great video, thanks guys.

  2. Alvaro Bracamonte says:

    test

  3. Filipp Issa says:

    Great panel talk – thanks a lot for posting this :-)

    All the best from Gamesrocker – Live Games Events, Berlin/Germany.

  4. Tony says:

    Very nice. Enjoyed the video.

  5. Azam Khan says:

    20 cents per user per DAU? LOLLLL.

    I think a lot of these predictions are spot on. Less virality, higher quality, higher retention, increased acceptance of gaming as a form of socialization, more competition, new innovation in advertising, no more farmvilles, increased crossplatform experiences, branching out of Facebook and more!

    One thing I’d like to comment on: Google is already ‘busting a move’ with Google App Engine. Check it out. The application BuddyPoke is utilizing it well and seeing a great success.

    Peace!

  6. Ric Moore says:

    Not sure about Ali’s point 1. As Pillow Fight has already shown, using stream publishing is actually a much more dangerous tool than notifications ever were. Until users get used to this feature they’ll find apps can write masses of crap to their news feeds without them even noticing.

  7. Social gamers are not looking for games says:

    [...] is Facebooking. Daniel James, Co-founder and CEO of Three Rings spoke about Facebooking at a recent panel on social gaming. They are mentally Facebooking. They are not there to play games, they are there to Facebook. And [...]

  8. Highlights of Last Week’s Discussion Panel « Research Labs. says:

    [...] If history is truly written by the winners, then last Thursday  will likely  go down in history as a pivotal discussion between a handful of social media giants.  As we mentioned on Monday’s blog, our COO Ali Moiz roped in a panel of of 2009’s biggest “winners” into an engaging  discourse on the future of the social gaming platform for 2010, along with well-seasoned editor, Eric Eldon of  Inside Social Games. [...]

  9. Google Hires a Developer Advocate to Focus on Games says:

    [...] will work on all of Google’s initiatives, though, and the company has expressed plenty of interest in social games in the past, including its Lively virtual environment, which it gave up on in [...]

  10. Peanut Labs | Video: Social Gaming Executives Predict the Future of the Industry in 2010 says:

    [...] What will be the most significant changes in social gaming this year? We joined a panel of social gaming executives last night at a packed event in the Googleplex in Mountain View, California to… read more [...]

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