When you think about the online gaming community, you may think about the traditional demographic of young males playing Xbox or PlayStation. However there is a new growing segment that is making big brands take notice – the ‘casual’ player. Social gaming is the fastest-growing segment in the video game business right now, its growth spurred on no doubt by popularity of social networking sites. Even as retail video game sales have declined over the past year, a growing number of people have been playing, and spending money on, social and casual games on the Internet and mobile phones. While players do not spend money on platforms or subscriptions, they often spend small dollar amounts purchasing virtual goods.
And when you have a user base of 235 million users per month, the small amounts add up. Farmville on Facebook anyone? Zynga is no doubt the leader, with 6 of the top 10 Facebook social games, and predicted revenue of $450 million in 2010. And 90% of Zynga’s revenue comes from selling virtual goods.
Marketers are also noticing these big congregations of social gamers. Advertising revenues are expected to increase from $62 million in 2009 to $124 million in 2012. Businesses can now advertise through custom games, product placements, in-game items, display ads and other branding plays.
It’s been rumored that Disney is nearing completion of a deal that would see it buy 'social' game maker Playdom. So why would a big brand like Disney take notice? Well certainly there’s the social gaming = additional revenue model as indicated by the Zynga example above. However, perhaps more importantly, this move would allow Disney to deploy new characters and brands across an additional channel to grow its market.
In other social gaming news, just this morning GameStop announced that it had acquired Kongregate, Inc., a social gaming destination and community that represents the fast-growing free-to-play gaming market. Currently the site hosts 10 million monthly players who spend approximately 23 million hours per month on the site. Kongregate's unique digital platform allows consumers to discover great free-to-play games that can be enjoyed via Internet-connected devices. Acquiring Kongregate strengthens GameStop's digital platform and its commitment to become the gaming aggregator of choice.
It seems that big brands are discovering the potential for social gaming as a source of additional revenue and perhaps more importantly another channel for customer engagement.