Trender Research™

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Social Networks and Gaming: Who is Going to Catch and Overtake Zynga?

It isn’t enough to feel like a neophyte and a need to catch up with the rest of the social networkers and their religious use of social media, but to now learn that the most played social network games and gaming company out there is a name that I did not recognize immediately – Zynga. Not only did I not recognize their name, but didn’t know that they are eclipsing 10 million daily users across their portfolio of games, is considered to be the number one application developer on Facebook, and is projected to reach $100 million in revenues this year. There looks to be a bright future in the online and casual gaming sphere and specifically around micro-transactions and payments. This apparently is how Zynga makes most of its money. With some of its leading games on MySpace and Facebook, it charges users for playing time or for things like chips in poker. These small purchases which usually amount to only a few dollars at a time can add up quickly. And that’s only with a small percentage of overall players opting to buy them. I’m guessing that their financial success is also a result of advertising that is bought and paid for around and inside the games themselves.

Zynga apparently is the #1 social gaming company on the web and has something for everyone: casino games, word games, board games, role playing games and party games which can be found on Facebook, MySpace, Bebo, Friendster, and Hi5. It is also experiencing success developing games for the iPhone and iPod Touch. There are a handful of social gaming companies that are competing with Zynga such as Playfish and Social Gaming Network-SGN. While the console and other interactively adept device types gaming manufacturers are certainly taking notice, the social and more casual gaming companies are targeting a populace that enjoy their gaming almost as much as the diehard action gamers and purists and that may count exponentially much greater numbers. While Texas Hold’Em Poker may be for the more docile of gamers, there also is Mafia Wars and the like for those who desire more action-oriented gaming but without the keen reactions and reflexes testing that only gaming consoles provide.

While the traditional console gaming manufacturers have their own social networking capabilities that includes talking with all players via VoIP as the game is played, it is the broader target audience that is young, old and every age in-between and more “relaxed” audience that the Zynga’s of the world are targeting and experiencing success with. The casual gamers likely don’t take offense to the advertising the way diehard gamers have in the past and continue to debate the merits of (subsidizing the very high development and production costs of the most sophisticated games that are brought to market). I’m intrigued now to the point that I will actively experiment with some of the games that appeal to my tastes, and move beyond very basic use of my Facebook profile. It is my nieces and cousins who compelled me to join Facebook, and I now realize they also are out in front of me with their social gaming exploits. Oh, and by the way, they’re mostly female!

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Comment by Brian Mahony on May 26, 2009 at 9:35am
Robert, you're on! Texas Hold'em challenge?

I know other Social Media app developers that have tried without much success. I think Zynga has become successful through the volume of their games, and then over time learning what works. The beauty and frustration of social media apps is you never really know what spaghetti will stick on the wall-- those developers trying to build the perfect application used by all will more often than not be frustrated.

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