As the world keeps pace with the social media phenomenon, Facebook’s gaming sector continues to develop swiftly. According to the social network, which had 1.06 billion monthly active users at the turn of the year, people paying to play games on its service have risen 24 percent since March 2012.
A new generation of gamers is being inspired and captured through Facebook. Technology has the power to excite imaginations and rapid growth in mobile innovation has fuelled the social market. Gamers have adopted new social and community play, now a finger-click away from digital interaction spanning the globe.
Potential opportunities in a market of such magnitude garnered immediate attention from the gaming industry. Small and large developers explored the sector, combining casino mechanics with social features like never before. Casino games quickly propelled to become the fastest growing social games genre on the web and currently account for more than a quarter of total social gaming revenue.
Innovation flourished on the platform, connecting online and mobile offerings to bricks and mortar operations. Multi-channel promotions and bonusing became possible, with gameplay integrated between sectors in compelling new ways. Brand awareness is heightened and players are given a platform to interact with casinos and share their casino stories and wins. MGM has even replicated a virtual Las Vegas on Facebook, allowing users to familiarise themselves with real-life casinos and games.
Those who looked at Facebook as a fad have been overcome by the sheer dominance of social networking. But due to the immaturity of gambling on Facebook, paths to monetisation remain blurred and a lack of clear regulation leaves companies in a precarious position as to the resources that should be delegated to social.
When IGT took a plunge into the sector with its $500m acquisition of DoubleDown Casino in January 2012, the industry observed with awe. It was the first time a gaming vendor had made such an investment into Facebook. A year on and it is starting to bear fruit. Revenues for the company’s interactive division increased by some 293 percent for the 2012 financial year, largely attributed to its social offering.
Based on virtual credits, social gaming is not restricted to the confines of regulated jurisdictions. According to research firm SuperData, the US accounted for 40 percent of social casino revenues in 2012, with Europe, Asia, Latin America and Australia following suit at 27, 19 and 14 percent, respectively. Players purchase virtual chips, tournament entries and in-game features, without the ability to cash-out.
Rather than rewarding players financially, social games have introduced offline incentives such as show tickets and discounted hotel stays at casino resorts. This is where the debate over regulation comes to play, whether offering non-cash prizes constitutes gambling.
Facebook takes a 30 percent fee of all gaming revenue acquired via its platform. But despite the high percentage, the numbers are not to be underestimated. In a recent memorandum, the company announced that it paid a total of $2 billion to developers in 2012. More than 100 developers generated more than $100 million each last year and most of the top developers received record revenue from payments.
Other figures noted were that 55 percent of the top 400 iOS apps are integrated with Facebook and the social platform drove 263 million clicks to the Apple App Store and Google Play from its mobile news feed. There are about 200 Facebook games with more than one million monthly active users each and more than 250 million people play games on Facebook each month.
Due to the company’s shaky IPO last year and to diversify its business model, Facebook is taking strides to improve the gaming experience by attracting more developers to join the site. Evolving features such as Facebook Connect that enhances options to play with friends, and Facebook Exchange that performs targeted advertising based on web-browsing history, are giving more reasons for companies to launch social gaming apps on the platform.
“If you’ve got games that are a little bit different from what’s out there, we’re happy to figure out how to make the platform work for you,” said Sean Ryan, Facebook Director of Game Partnerships, at the Game Developers Conference in San Francisco last month, “This is an important category for Facebook. It’s good for Facebook. It’s good for users.”
