• GigaOm, Friday, January 2, 2009 11:30 AM

Social gaming may be a growth sector, but GigaOm's Wagner James Au warns the coming year will bring challenges as well as opportunities for social gaming startups. One of the biggest challenges, he says, is that the majority of startups are still at the mercy of top social networks like Facebook, which have a habit of suddenly changing their policies. Such changes can have an adverse affect on third party application makers.

There's also unpredictability in competition. Most social networking games are easy to reproduce, so developers often find themselves competing with knockoff versions of their own app. Also, the proliferation of poor quality games could hurt the sector as a whole, says Kristian Segerstrale, CEO and co-founder of Playfish: "Poor quality user experiences or misleading monetization mechanisms like some of the aggressive CPA practices we've seen in 2008 could jeopardize the perception of social games and our growth potential as an industry."

However, Au says that uncertainty and opportunity are two sides of the same coin. As yet, audiences are small, just a fraction of those who use social networks. Even so, Mark Pincus, founder and CEO of Zynga, says, "The biggest challenge for social gaming in the year ahead will be to become useful and fun to non-gamers and to reach the mass market who have yet to embrace web gaming."

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