Social Games Could Branch Out To Search, Publisher Sites

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Social game makers looking to build brands could bring content to search engines, publisher sites and destinations other than Facebook, according to eMarketer Senior Analyst Paul Verna. While no proof exists today, social game makers have grown weary of restrictions in Facebook.

Search engines typically do not host social games for makers today, but Google did make a "significant investment" in Zynga, and Microsoft last year launched a game destination on Bing. Clearly, search engines see an opportunity, but it's not completely understood if investments directly tie to future features search engines might make or they are simply capital investments.

That's not to suggest game makers will forgo hosting social games on Facebook. The rise in popularity of social network sites as a venue for casual games will drive overall U.S. social gaming revenue to $1.09 billion this year, eMarketer estimates. Nearly 62 million U.S. Internet users, or 27% of the online audience, will play at least one game on a social network monthly this year -- up from 53 million in 2010. Their numbers will continue to grow, and along with them, money spent on virtual goods, lead-generation offers and advertising.

Revenue from virtual goods made up the majority of social gaming revenue in the past, and they will continue to bring in the biggest share of dollars through 2012. Ad spending will grow more quickly; in 2011, marketers will spend $192 million to advertise on social games, nearly a 60% increase over 2010.

Verna also sees a trend to converge social and traditional gaming. Expect more console gaming franchising to migrate into the social space. Or companies like Electronic Arts and Disney might branch off using the equity they developed in console games and invest in social.

Meanwhile, momentum continues to accelerate in social games as more developers decide to host content off Facebook. Retailers built destinations on third-party sites, and social game makers will likely follow, according to Verna. "Social game companies are frustrated with Facebook because the social network takes a big cut and obligates them to use Facebook credits for monetization," Verna says. "Facebook also has so much power by virtue of its size. The company also put limits on how game apps marketers can post updates."

Verna says that six months ago, everyone in a member's Friend network would receive a published notice on their newsfeed about events done in FarmVille. Then members complained about being bombarded with notifications they didn't care about, so Facebook made a change and no longer sent automatic notification to everyone in the person's network -- only those already playing the games.

It limited the viral spread of games. People caught on to social gaming by being on Facebook, seeing updates continually, being curious, and checking out the games. Many gaming company executives now believe they need to develop brands on sites beyond Facebook, and that could mean finding a home on search engines, although there is no proof to suggest that will happen.

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