What's next after Social Games ?

When Facebook shut down the free viral channels, started charging for advertising to replace spamming and demanded a cut of social games revenues via Facebook Credits they have changed the entire games mechanics of social games and its economics. Lets look at what's the key ingredients for social games success ?


1. FREE Virality *brings you the big numbers / spams do work no matter what you wanna think !

2. The Social Network Distribution *aka Connecting info with friends.


Why did Zynga canceled its deal with MSN to carry Farmville ?

For starter maybe MSN do not have a social network for distribution, Social Games cant succeed without the viral elements. This then presents a very interesting situation - it simply means social games cant get people to play them unless they are inside a social network such as on Facebook. I have heard this from Alex St. John *President of Hi5 whom is going big on more serious game play with Hi5 social network - "The only advantage social games have currently is that the Valley thinks they are “hot” and is willing to invest lots of money in them". Being "HOT" is not a bad thing for many studio's and companies tho' ...

It is said that outside of Facebook, Farmville simply can’t hold its own against games like Bejeweled and Scrabble when it comes to monetizing a casual audience. Well it maybe true as we dont see any farm game outside of a social network that's successful except now we have farm game on iPhone and Android phones which whom are not the top games as well *"Angry Birds" beats any farm game on the iPhone. So how do a farm game compares or competes against downloadable casual games ?

Lets check out MSN to see which are the top front page games ? If Farmville genuinely has superior online economics, it will be on the top chart. But it appears that Farmville isnt but games' like "Cubis" occupy and monetizes best on MSN.

THE ARGUMENT

Alex from Hi5 believe that - "social games” as we know them will be a forgotten internet fad, ultimately consumed by the already mature online market for downloadable and multiplayer games". Richard Garriot (*Ultima Online) and many top game experts worldwide joins in this believe and had started what is deem a more serious MMO game play for social networks or "using" social networks. Some argues that the demographics of social games consist of people whom had never played a single online games before. These are my and your mom, ladies, grandmothers and even the aunties next door. And they are spending money to pass their time. Will these people be your core audience for a more hard core MMO ?

Price and cost of operating a new game on Facebook had increased so much so that now its no longer a viable business for many to kick-start new games on Facebook. Look at the cost factors:

(a.) Facebook credits 30%
(b.) Advertising cost between USD 0.30 to 1.00 per user acquisition.
(c.) Servers and bandwidth cost.

*At the end of the day operators are paying out about 60% to 85% of their revenues if they are lucky to be able to design games that monetizes on Facebook. More than 80% of games do not monetize on Facebook today. Some are used to draw audiences and numbers that are then reused to cross promote their other games.

This means Facebook social games are now designed only for the bigger players whom have a deeper pocket funded by venture capital money.

FACEBOOK & SOCIAL NETWORKS AS A PLATFORM

Ultimately social games will still have a market on Facebook certainly but its growth will not go on forever as some gamers or players will move on to more sophisticated, highly competitive MMO games. This shift is already happening now slowly a step at a time with games like Kingdom of Camelot and we will soon see more to come.

The big boys like Zynga, Playdom, Playfish and some will eventually start refocusing their games and acquisition of real MMO studio's will begin maybe as early as mid to end 2011. At the end of the day an online game requires a more in depth game play and mechanics versus repetitive play. We can notice this "change" in China on the farm game operated by QQ where its already have more features and play methods than what Farmville is offering. The game design will continue to move towards being more complicated traditional MMO style while still maintaining the "Social Elements" whom had help rocketed social games today. Who knows maybe - "Social MMO" will be the next games revolution on Facebook !!!

MMO can use Facebook and its social graphs as a marketing, advertising and promotions tool as its extremely effective and efficient method to push and promote games. However we look at it Facebook and other social networks do have its use as a "Key Promoter" of games whatever genre it maybe. MMO companies should grab this opportunity espcially via Facebook Connect while its still unchanged today as the rules maybe rewritten again tomorrow.