Using Facebook Connect, visitors can play directly on the Petsociety.com Web site, removing the the forced interaction with Facebook itself. You do still have to login, but you aren't forced to play games as part of the Facebook "experience"--rather you can interact with the game and other players through the API.
I've struggled with the idea that an application/game/what-have-you can ever become hugely profitable if it's locked into the Facebook platform. Ultimately, Facebook makes the rules and companies have to abide by their methodology. And limiting your user base strictly to Facebook seems like a risk. Sooner or later you'll need to break out of the Facebook walls and onto the internet itself.
The very positive aspect of this is that Facebook realizes that openness equals more users and theoretically more revenue. It's in their best interest to make Facebook Connect the most prevalent platform for games and applications to flourish online--a realization that many companies have yet to make.
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The enterprise software market has been going through a product-to-service transformation for a number of years. One clear representation of this is the boom in open source and software as a service, both of which are built on a different value curve in relation to typical enterprise licensing.
The game market is at the beginning of an evolutionary path--moving from purely packaged games played on consoles to browser-based free-to-play and hybrid-hosted scenarios.
The crux of the change is in how games are monetized when there is no direct license revenue; ads, subscriptions, and virtual goods all have a place in the new ecosystem, but thus far, no one method has proven to be best.
I wrote previously about social-game company Playfish, when it launched a premium in-game ad campaign with Procter & Gamble and Herbal Essences via the Geo Challenge Facebook game in the United Kingdom. Playfish also introduced in-game advertising with Google and in-game transactions via Facebook earlier in 2008.
I asked Playfish Chief Operating Officer Sebastien de Halleux how a company developing casual games ever makes real money. As it turns out, several companies are already generating real dollars. The Playfish founders came out of Glu Mobile (in Europe), which apparently generates about $100 million in annual transactional revenue.
According to Sebastien, the challenge is less about revenue generation and more about distribution. Video games have a perceived value in the end users' mind. The trick is to become the facilitator of transaction-based monetization.
Playfish has five games, with 40 million users playing approximately 30 minutes per day. That engagement is worth a lot in the consumer advertising world, but most advertisers haven't caught up online yet. They spend the majority of their ad dollars on text ads and TV spots but haven't yet figured out how best to take advantage of user engagement as part of a social fabric.
Virtual worlds and good solutions are generally meaningful for end users, but the exclusivity of the content is what drives advertisers to pay to own the engagement cycle.
One challenge is that it's very hard to predict revenue due to the hit-driven gaming environment (not Web page hits, but hits, like big winners). Games, like movies or books, have a few hits, and you need to be able to build the hits and manage the portfolio to kill lesser titles.
Playfish started experimenting with user-generated-content (UGC) in its Pet Society game over the holidays. Users were able to create their own Christmas cards based on their avatars on Facebook, and hundreds of thousands of users participated.
Another interesting factoid related to UGC is that the audience for the Playfish games has changed a bit. It used to be females ages 35 to 45, and the new user base is closer to ages 18 to 34, primarily because of Facebook.
Sebastien alluded to Twitter integration sooner or later, something that I think makes a lot of sense because Twitter is a perfect utility to let your friends know that you just did something socially, even when they are not sitting next to you.
Don't forget that you can follow me on Twitter @daveofdoom.
Social games company Playfish just launched a new premium in-game ad campaign with Procter & Gamble and Herbal Essences via the Geo Challenge Facebook game in the UK.
In April Playfish launched in-game advertising with Google and in July launched in-game transactions with Paypal. The launch of this new premium game shows some of the advertising possibilities available during this economic downturn.
The upside? An audience that already likes the Geo Challenge game who are likely willing to experiment with this new module resulting in increased brand awareness. The downside? This doesn't seem easy to do as Playfish basically had to create a new game, which takes time and effort.
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