Google quietly held
a gaming conference, ThinkGaming, earlier this week to show analysts and marketers its view on the future of video games and opportunities in search and advertising to drive traffic and engagement.
Details are sketchy, because some of what analysts saw remains under nondisclosure, but perhaps we can piece together more of the puzzle. During the next few months, Google will begin
releasing information on their gaming platform strategy, according to people in the know.
Meanwhile, let's recap game-related acquisitions: Google announced Slide last Friday, reports
surfaced this week of Jambool, which provides virtual currency; and in-game ad platform Adscape (2007).
Google CEO Eric Schmidt views a game platform as a utility to connect all things
Google and people who use the tools. He has been sighted as saying the industry will not see a social network similar to Facebook from Google, but the tech company will leverage Chrome, Android and a
well-established network of engineers and developers that can build and sell games. The strategy would likely tap Google Checkout, the online payment service that competes with PayPal, to purchase
games and virtual goods.
Following yesterday's event, Lazard Capital Markets Analyst Colin Sebastian released a research note to investors confirming prior assertions the research firm
made. The research note explains that games could help drive Android, Chrome and Google Checkout adoption. Driving Chrome adoption would accelerate online Web application use overall.
Google's Chrome Web Store Announced at Google I/O in May, Google's Chrome Web Store will provide the analog of the iOS App Store and Android Market for Web browsers, according to Lazard Capital.
Analyst for the firm expect games will become a key component of this strategy, since online casual gaming is one of the fastest-growing sectors online, about $800 million in revenue last year.
Incorporating Google Checkout in the Chrome Web Store could accelerate online game adoption by improving game discovery; a central part of the Apple App Store's success is attributable to the central
nature of the store.
The report also highlights that Google provides integration support for Flash in Chrome, but more importantly has begun to push HTML5 technologies and an open source
project called Native Client that will enable browsers to emulate local PC/console style code execution, to increase the graphics in games, Lazard Capital analysts explain.
Some reports
focusing on Google's game strategy appear a bit limiting to me knowing the capabilities Google engineers have demonstrated in the past. Yes, the company has run into brick walls when it comes to
social sites, but their talent will work it out. If not, they'll buy it.
The direction not only presents fodder to compete with Facebook, but Microsoft's search engine Bing and in-game ad
platforms like Massive. The strategy will likely run across PC, mobile, and Google TV, set to launch later this year.
Research firm eMarketer expects marketers will spend $220 million
worldwide to advertise in social games and social applications in 2010, rising to $293 million in 2011. These figures do not include ads within mobile applications.
Zynga and Playdom are
companies realizing their games are logical advertising destinations for marketers wanting to get the attention of "rabid fans," says Debra Aho Williamson, a senior analyst at eMarketer.