Facebook and the Fate of Social Gaming in 2010

Facebook Logo

Facebook is staggeringly huge. They have over 400 million active users, half of whom log in on any given day, over 500k active applications, and can rattle off plenty of other impressive totals for those who’d like to listen. As an open platform, they have provided companies like Zynga and PlayFish with millions of dollars in revenue, and provided many other developers with a shot at financial success. Despite these achievements, and despite an estimated company valuation that extends into the billions, monetization remains the one aspect of Facebook’s business that hasn’t matched their growth. With this week’s sure-to-be-critiqued changes, that last piece of the puzzle may be ready to fall into place. But first, a bit of background…

On January 21, a group of the Bay Area’s social gaming forces descended on Google’s Mountain View campus for a panel discussion hosted by Peanut Labs and Google Orkut. The evening was inspired by a post on Three Rings CEO Daniel James’ blog which laid out some predictions for the industry in 2010. The panelists included folks from Zynga, RockYou, PlaySpan, Three Rings, Outspark, and Inside Social Games, and they all seemed eager to share their opinions, even if most kept their cards close to their chest while doing so. As the discussion progressed, one thing became crystal clear: the growth or decline of social gaming in 2010 will rest largely on the shoulders of Facebook.

Specifically, the discussion hinged upon upcoming changes to the way Facebook interacts with applications (changes that are now being put into effect). Prior to this week, any programmer on the planet, given some development time, could make money off of a Facebook game without Facebook earning a single cent. Devs could even use Facebook’s tools to grow their game virally for free, sending messages to users and posting notifications on players’ newsfeeds.

This was, originally, in Facebook’s best interest, since being an open platform helped them attract the attention of thousands of developers. It also meant that Facebook owned all the users these games collected, making the developers reliant on the platform for their successes. This setup worked like a charm, allowing folks like Zynga and PlayFish to reach a huge audience and turn an enormous profit.

Now the folks at Facebook have, understandably, decided they want to monetize the successful system they’ve developed. As a bonus, they’ve also figured out a way to clean things up in the process. The new “games” page borrows heavily from Apple’s app store setup, providing users with lists of the most popular games and info on what their friends are playing. Meanwhile, the recently introduced Facebook Credits will provide users with a universal in-app purchasing system. Finally, once the changes are solidly in place, applications will not be allowed to send notifications directly to their users, cutting down on the “spam” messages that many have complained about over the last year.

Facebook Games Page
(Image courtesy the Facebook Blog)

This promises to make the user experience significantly smoother on Facebook, but it also marks a significant shift in power behind the scenes. By making developers live within the framework they’ve established, Facebook is forcing devs to rely far more heavily on traditional outreach like PR and advertising for growth. Advertising is of particular interest to Facebook, especially when you consider the incredibly valuable ad space they now have to offer on the “games” page. Facebook Credits, meanwhile, will let them take a measure of control over in-app purchases (as well as a small cut of the profits) while solidifying their grip by getting users to tie their credit card info to the platform.

Thus, the new system still provides developers with room for viral growth, but it’s not going to be the rampant, sometimes questionably spammy, growth of the past. Facebook is taking control of the platform, both for their own sake and, ostensibly, for the sake of their users. This could be bad news for the developers who have been really cashing in, but as with Apple’s app store, developers that are willing to play by the rules should still be able to profit handsomely.

At least, that’s what Facebook is hoping. Only time will tell whether this plan will bear fruit or put a chokehold on the rapid growth of social gaming on the platform. Either way, 2010 is going to be interesting times for the social gaming industry!

Developer Support Is a Bigger Factor in iPad’s Success Than Some May Think

Yesterday, Apple unveiled its much anticipated and highly rumored iPad to the masses and easily stole the media thunder from President Obama’s State of the Union address as well as becoming a top trending topic on Twitter, not including all the joke references to feminine hygiene products. After all the hoopla settled though, many tech editors started to really break down exactly what was revolutionary about the iPad and the general consensus seems to be that, well, there is nothing incredibly outstanding.

At first glance, the iPad looks like a pageant winner. It boasts the same sleek, attractive contours as the iPhone, which has lured many to purchase it based on aesthetics alone. iPad’s larger screen with its 1024×768 resolution is, of course, very much welcomed in a society that loves to do everything bigger and better. And lets not forget about that enticing price point beginning at $499. Apple could set its retail at twice as much and fanatics would still buy the new peripheral in a heartbeat.

Take away the glitz and glamor though and you still just have a glorified iPod Touch:

– there is no camera present (which means no augmented reality)

– no ability to run multiple applications simultaneously

– Adobe Flash is not supported

However, does this mean that developers will be deterred from creating new apps specifically for the iPad? Not necessarily, but the success of this new device may largely depend on developers making iPad specific apps to help differentiate it from the iPhone/iPod Touch as well as other gaming platforms. Between the three aforementioned downfalls of the iPad, the third one may perhaps be the most hurtful. The Android OS as a gaming platform is already starting to gain momentum despite its OS limitations (mentioned a couple months back). What further distinguishes Android in the gaming space is its ability to run Flash, which could prove to be a major game changer in the mobile gaming industry. With iPad lacking this now almost crucial feature for the next generation of mobile gaming, there’s not much else that separates it from its mobile Apple cousins. Sure, iPad packs a much larger processor, but if the console wars of the last five years have taught us anything it’s that stronger hardware capabilities do not equate to increased 3rd party support which is necessary to drive higher console sales.

Undoubtedly, many developers will initially hop on the iPad app bandwagon but if sales of these apps are lackluster we may just be seeing more iPhone/iPod Touch ports appear on the iPad instead. Though Apple hasn’t given developers anything truly novel to work with, the appeal of success is still there and it may be game developers that really help to shape the future of Apple’s new toy.

Google’s Nexus One – Changing the Mobile Gaming Market?

While the iPhone has taken the lead in attracting development for the mobile gaming genre, and development for the Android has been trailing behind, many folks are currently wondering if the Nexus One will be the device that truly changes the mobile game development market around in favor of the Android open source mobile operating system.

The Nexus One is Google’s latest smartphone to hit the market – releasing just a few days ago during CES on January 5, 2010. The phone runs on the newly released Android 2.1 operating system, which features a number of significant enhancements such as Live Wallpapers that are animated in the background and react to different user inputs, an Application Drawer that can be pressed to access the list of applications installed on the phone, and a Media Gallery that provides several new features allowing users to browse, edit, and share photos and videos on the phone with just the swipe of a finger.

Aside from these dazzling enhancements, the Nexus One features some real meaty upgrades such as a 1GHz Snapdragon processor, on-chip graphical capabilities and a 480×800 resolution screen (ideal for gaming) that truly set this device apart from the iPhone. And the kicker…..Adobe has confirmed that Flash Player 10.1 will be coming soon to the Nexus One, and they promise that it will provide a consistent, cross-platform runtime across desktop and mobile devices.

This news is particularly significant because Flash-based game development is so widespread in the gaming industry, yet the iPhone doesn’t support Flash. Highly-trafficked and popular entertainment genres including social games (via Facebook, MySpace, etc.) and virtual worlds monetizing through the sale of virtual goods and microtransactions are primarily Flash-based. The opportunity to additionally monetize from the Nexus One platform is significant news for mobile game developers as well as the many Flash game developers who have held off from developing for the iPhone SDK due to these limitations.

As it stands now, the Android Market has about 18,000 apps available while the iTunes App Store features upwards of 100,000 apps. It is yet to be seen whether Google’s Nexus One will be a game changer for the mobile gaming space, but considering how fast this market has moved in the last year, it won’t be long before we find out.

Join the Wave: Google’s Not-So-Secret Society


I recently received an invitation to the most exclusive group in town; a Cool Kids Club, if you will. The fact that this tight-knit group is comprised of 100,000+ cool kids is of no concern to me. The way I see it, the world is now separated into two groups of people: those who been invited to preview Google Wave and those who haven’t.  Whether or not you have been chosen, I invite you to read this enlightening overview of the platform.

Google Wave is a brand new, real-time communication service that three Australian masterminds created, all of whom were previously involved in Google Maps. It is a conglomerate of different aspects of email, instant messaging, and wikis. Web chat, social networking, and project management are also featured in the platform. These functions all work together to build what Mashable Online has dubbed “one elegant, in-browser communication client.”

A wave is a threaded conversation that can include one other user, a group of users, or even robots.  A robot is an automated participant inside a specific wave that can interact with waves and converse with other users. These robots can offer information from external sources, such as Twitter, and are considered extensions.

Extensions are mini-applications that function within a wave.  Along with robots, gadgets also exist as primary extensions. Gadgets are like Facebook apps and many of them are built on Google’s OpenSocial platform.  Google Wave gives developers the opportunity to build applications and these extensions within waves, like with a Facebook application or an iGoogle gadget. These can consist of anything from bots to intricate, real-time games. To encourage innovation among developers, the Google Wave code is open source.

Another attractive function that Google Wave offers is real-time chat.  This chat allows the user, most times, to see what another member of the wave is typing, character-by-character. Google Wave also has a playback function so you can review any piece of the wave’s conversation.  Since all conversations within a platform are shared, any user within a developing conversation can edit information or add commentary. This feature is especially helpful in keeping one’s waves focused and concise. Initial reactions to real-time chatting can result in messages like, “OMG!!! I can see you typing!!!!! This is so cool!” The wiki functionality allows you to tidy up this enthusiasm.

As if it’s not enough that Google Wave is good-looking and popular, it also knows natural language. It can autocorrect your spelling and knows the difference between similar words, such as “red” and “read.” Google Wave can also auto-translate at the drop of a hat.

To those of you longingly watching this dance party from outside the discotech, don’t lose hope.  Google Wave awards those who obsessively update their waves with a slew of invites to extend to friends.  So, ask around and find that one friend who will welcome you in to the clique.

Don’t Throw in the Towel for Google Just Yet: Android vs iPhone as a Gaming Platform

boxingWho hasn’t heard of Android lately? Chances are you have at least heard of Verizon’s DROID (running Google’s Android 2.0 OS) since its massive ad campaign started a little more than a month ago. DROID does a whole bunch of stuff that the iPhone may struggle with doing, but there is one thing in our industry that DROID just doesn’t do well at all: act as a viable and profitable gaming platform—at least not yet.

Android is an appealing gaming platform for developers. It offers open-development whereas iPhone has a proprietary, closed system. The app approval process for Android Market is a walk in the park compared to the iTunes App Store, and Android Market’s registration fee costs $25 against Apple’s $99 SDK requirement. So why aren’t developers jumping on the Android bandwagon by the boatloads? Simply put: consumers aren’t paying for apps on their Android handsets like they are on their iPhones.

Econ 101 will tell you that money lies with the market and at the moment, there is not much of a gaming market for Android. Developers have openly discussed the dismal revenues being generated by Android when compared with iPhone’s shining profits for the same apps. Gameloft recently stated that they sell 400 times more apps for the iPhone than they do for Android. Gameloft even went on to announce that they were cutting back investment for the Android platform (yet a few days later rescinded the statement and reaffirmed support). Why the sudden move to reinvest in Android? Possibly because market trends suggest that Android devices could be a serious contender in the near future.

AdMob recently released statistics showing that 75% of U.S. web traffic browsed on smartphones were from either an iPhone or Android device. Of that 75%, Android is holding on to 20% of the web traffic and shows signs of gaining a bigger market share. Android devices are now being distributed by multiple handset manufacturers and available on most wireless service providers, whereas Apple is the sole manufacturer of phones with the iPhone OS and has an exclusivity deal with AT&T for the moment, therefore limiting its rate of growth. With these factors in mind, it will only be a matter of time before the number of Android users starts to catch up to the number of iPhone users in the U.S., therefore building a substantial base market for Android Market.

With the Android install base set to massively grow, here’s the big question: when are all the sweet Android games coming out? The audience will be there, Android Market is equipped to handle app purchases with ease, what’s the hold up? Unfortunately, the biggest obstacle to Android becoming a worthy adversary in the mobile gaming arena is the operating system itself.

Android can only run apps from its onboard memory. On DROID, that’s 512MB. On every other Android device, it’s only 256MB. The Android OS also runs off this same onboard memory, leaving even less space for apps. Furthermore, SD cards can’t be used to store apps on Android either. iPhone can utilize most of its hard drive for storing apps, currently ranging from 8GB-32GB of capacity. Sega’s Super Monkey Ball was one of the first apps launched for the iPhone last year, weighing in at 36MB, and if you could play it on Android, that would already take up a good size chunk of the app space available to you. Fast forward to today’s apps where graphic intensive games like 2XL’s ATV Offroad are 100MB+ and you can already see the problem with porting these bestsellers to Android. Sure there are much smaller apps available but the capacity, or lack of, in Android devices is what ultimately hinders it from being a major player in the gaming space. Even at only 10MB per app, just a mere handful could be purchased and kept on any Android device. How can a featherweight compete against a heavyweight?

Android has a lot of potential for the mobile game arena. If Google addresses some of the OS technicalities, Android could pack on some serious pounds and add gaming to the list of things DROID does.