Making Money with Social Games for Social Platforms

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Jeremy Liew (Lightspeed Venture Patners), Mark Pincus (Zynga Game Networks), Shervin Pishevar (Social Gaming Network), Michael Lazerow (Buddy Media), John Hwang (Tripmonger) spoke at GSP West about social games.

The panel talked about what they are doing and how they are making money. It all starts with how social games are different?

The opportunity is to create the very personal social gaming experience that we see when families play the Wii. Creating games like this online is the goal of social games. It’s about bringing people together, whether they be strangers or friends or family. The psychology of the games becomes more important in social games. The perspective is on an easy way for people to hang out together, not on game technology.

Experiencing the internet together is more fun than doing it on your own. A good rule of thumb is, if it can’t be made better using Facebook don’t do it. Users enjoy the light weight nature of these apps. Social gaming takes share from casual gaming.

Scarbulous is the breakout game. It’s so simple that it allows you to interact with lots of people in a light weight asynchronous interaction. Long playing synchronous games are played in a single session that doesn’t create a reason to come back. Asynchronous games give you a reason to come back. This can cause powerful viral effects.

Branded games are the key to monetization right now. It’s highly efficient way to get major brands and media companies reach their audiences. Average deals right now are about $100,000 for Buddy Media and they are sold out of inventory right now, so they are working on monetizing other company’s games. Another great opportunity for monetization is virtual goods. The amazing thing is that all the companies on the panel were profitable and they think there is still more upside if they can close brand deals.

Are social games a hit driven business? Games are hit driven. The big ones get bigger and the rest fall off. The is definitely a cycle of growth, use and then fatigue. The end level though may be higher than what is seen elsewhere on the web. A number on the panel are working on how to create networks to help leverage existing installed base of applications, either through click networks, APIs, partnerships, platforms that can be rebranded or acquisitions.

[tags]gspwest08, graphing social, social games[/tags]

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One thought on “Making Money with Social Games for Social Platforms

  1. Beyond this words, the reality is that social games are not receiving any profits in money, except from other applications that pay them for putting some ads.