It seems that these days, everyone wants to predict the death of something. Whether it is the death of PCs, the death of TV, the death of the iPhone, or whatever else out there that is so ubiquitous or popular, everyone seems to think that “next year” will be the year that they go out. So far, I think only the prediction of the death of the netbook has been correct.
The pundits are back at it again, and this time, it has been with social gaming, and in particular, gaming on Facebook. Whereas in the past, lackluster performance from Zynga’s IPO last year caught a lot of flack, this past week, EA announced that its pulling several of its games from Facebook, including titles such as The Sims Social, SimCity Social, and Pet Society. Moreover, new metrics from market research firm, SuperData, point out that total revenue in March 2013 reached a new low in over a year, with total revenues of $124M, and the monthly active users (MAU) dropping below 200M.
End of Days, or Natural Selection?
To some, EA’s closing of its games is a sign of the end of social gaming. However, let’s not forget that EA is not the market leader… at least not in social gaming. Looking at the top 25 Facebook games based on MAU, as reported by AppData, the only EA game appearing on the list is ranked #19: EA PopCap’s Bejeweled Blitz.
In fact, just look back to 2012, and you will find a number of other doomsayers announcing the death of social gaming with Zynga’s freefalling stock, yet social gaming is still here, and there is a new “King” in town, with King’s Candy Crush Saga taking 1st place for the 2nd month in a row.
Where the pundits are seeing the “end of days” in social gaming, it may perhaps, just be a “natural selection” process going on. For the social game market, this is nothing really new. Back it up to 2009, and it was a bit of a feeding frenzy, as developers came out from the woodwork and were developing games at a very rapid pace. In fact, it felt like that they basically take the same gameplay and made a few modifications and changed the themes to create multiple games in rapid succession. Some of these companies even blatantly copied games from each other!
But over time, the number of social games on Facebook start to get weeded out, and eventually, only a handful of key developers remain, with the number of new entrants coming in at a much slower pace.
Games Don’t Live Forever
Social games are constantly being retired. There comes a point where the company can no longer justify the costs for keeping a game running. What good is it to keep pumping money into the upkeep of the servers, paying devs to keep the content fresh, and so forth, if the players are no longer generating a profit for the company? The fact that EA is pulling the plug on some of its games just makes business sense, but it is hardly a reason to predict the demise of the entire social game industry. In fact, as mentioned earlier, Bejeweled Blitz is still going strong, and there is still the highly anticipated Plants vs. Zombies Adventures game coming up. There will eventually come a time where even these games will face a similar demise, which is all a normal part of the video game cycle.
Mobile Transition (or Convergence)
Perhaps, it isn’t so much that social gaming is dying, but that it is merging with mobile gaming. With the rise of the smartphone, more people want to take their Facebook gaming with them on-the-go. King’s Candy Crush Saga is widely played on both platforms. For many games, the Facebook and mobile counterparts are now synced together, that players can truly take their game together with them regardless of the platform they use.
On the other hand, mobile gaming may also be taking away from Facebook games. While Candy Crush Saga may be popular on both Facebook and mobile platforms, but King also has its own independent website that it could run the “Saga” version of the game. On the flip side, Kabam, known for its mobile MMOs, does have its own website where it also runs some of its games, though the games do not necessarily sync up with their mobile counterparts. At least not yet…
So in a way, mobile is taking away from social gaming to a degree, but it is also a way to gain new gamers to Facebook.
Interesting Year Ahead
While the social games revenue may be down compared to several years ago, it will be interesting to see how 2013 plays out. On the one hand, it seems that mobile gaming and social gaming are converging, and instead of separating the two markets, it might make more sense to lump them together into a single market that is growing at a rapid pace. On the other hand, it is also an exciting time as newer entrants into the market are forging ahead, and there is still room for these new developers to thrive.
Where do you think it is headed? Will 2013 be a pivotal year for social gaming, or will it be the year that social gaming and mobile gaming combine to form a new market?
