The Serious Business Of Social Games
Broad and diverse audiences play games, such as "It Girl," "FarmVille," "Superhero City," and "Happy Aquarium" for hours on end. The industry generated more than $2 billion in sales last year in the U.S., and the number this year figures to be a lot larger. What are these users buying? Virtual goods. You know, swords, beans, life points, invisible cloaks, fish food, etc. And it's not just kids. This audience is replete with moms, baby boomers, and professionals who while away their workdays in these virtual worlds.
If you find this puzzling, consider the powerful forces that are working to capture and hold on to users' attention. A standard video game provides challenges, excitement, and escape. The good ones even tap your brains and your wits. Social games have all that and more because your friends are there sharing the experiences. They're helping you, or competing against you, or just watching. This creates pressure; it creates competition; it creates the distinct feeling that if you don't log in right now you are going to miss out on something.
This feeling is strong enough to move many people to swipe their credit cards in order to pick up virtual currency and keep up with the Joneses. But social game publishers have found other ways to turn their coveted virtual shinies into real-world dollars. Users can complete surveys in return for points; they can sign up for Netflix or for credit cards. They can even make online purchases (and receive virtual points the way others receive coupons). One of the newest and most popular ways to earn virtual currency is by watching videos. Millions of users find it a fun and easy way to advance their gaming experience - without spending any money or filling out a form..
Two billion dollars is not a bad start, but we feel that the social gaming economy is nascent. Games will get more sophisticated; usage will continue to climb, and brands, of course, will find their way into the fray. The opportunities awaiting them will be rich and plentiful. You see, in this environment, you don't have to interrupt consumers to connect with them. It's quite the opposite. Social gamers are ravenously hungry for deals that help them get ahead, and they will actively seek out brands that are willing to trade a few virtual points for a quality interaction. We're seeing amazing success with video, and expect it to continue. Click-to-site programs, online coupons, e-tailing, promotions, contests, and sponsorships all have big futures in this space. It's just a matter of time before social gaming becomes a mainstream advertising medium.