Gaming and Social Networking

Here are a few article sourced from the excellent Beauchamp College Media blog which really is worth a look through for all of AS media.

These articles explore the growing market for online gaming through social networks and the internet which is now becoming a billion dollar concern thanks to the success of such companies as Zynga.

This article from the Guardian explains that Google see games as crucial to establishing a social network to network with Facebook, which they see as a their main rival for online advertising revenue. Here's video to watch as well.

The last paragraph on this PC World article attempts to explain why Facebook is so important. One way of thinking about this is that for casual gamers (as opposed to hardcore) the games come to them on Facebook - they don't have to go to get a console, a telly, a game - all they have to do is log on Facebook.

Have a look at this article on gigaom that focuses on mobile social gaming as it outlines different ways of monetising the products and the last paragraph touches on the issue of proliferation.

This article from the Social Times, looks at the economies of social gaming, of particular interest is the paragraph on generating revenue through non-advertising revenue:

'While numerous gaming companies are generating revenue through advertising sources, Playdom has opted to generate most revenue through micro-transactions, primarily consisting of virtual goods sales. Right now these micro-transactions account for 90 percent of Playdom’s revenue. Approximately 2 percent of the company’s user base pays for virtual goods. So how much do the paying users spend?

According to Pleasants, if the average paying user for a game is paying $20 a month for 3 to 6 months, it’s considered a successful game. With these numbers, you can quickly do the math on how much revenue is being generated. Let’s use Farmville as an example. The application currently averages around 30 million daily active users. That means 600,000 are paying each day. If each of those paying users are generating $20 a month, that application alone is generating $12 million each month, or almost $150 million a year.'

This Business Insider article is a real eye opener particularly when it explains the amount of money Zynga brings to Facebook:

'But what's really amazing is that Facebook makes loads of money from both of these companies and their competitors. Groupon and all its clones buy lots of Facebook ads – about a third of all the ads Facebook sells, in fact, a source at a Facebook-ad buying firm tells us. Zynga and the other social games publishers buy another third. These gamesmakers also pay a 30% tax to Facebook for use of its credits system. Facebook revenues from the games business was around $400 million in 2010, we recently heard.'

So Facebook tax Zynga's profits at 30% for use of the social network AND a third of ad revenue is from these games company.

Lastly, here's Mark Zuckerberg talking about Facebook - it's an hour long so perhaps put in on in the background when you're ironing.