With the tremendous popularity of Facebook and the appeal of real-time simulation games, social gaming has acquired extensive acceptance. Social gaming has become an online phenomenon and the runaway success of FarmVille and other social games such as Zoo World, Happy Aquarium, Pet Society and Restaurant City is said to triple by the year 2012.
The revenue in many of these games is usually through the sales of virtual goods. Relatively few of those gamers are paying to play or to purchase virtual goods and currency, although those revenue streams make up a large percentage of total social gaming dollars. On the other hand, one can play the games for free, and invest time instead of money. Although not paying directly, the free players are effectively helping either directly or indirectly, by inviting more people from their network over time to play the game. Typically a few percentages of the total users convert into paying ones, a factor which depends hugely on the game design and target audience.
There are two significant metrics DAU/MAU and K-Factor — that are the means to understanding if a game goes viral and popular in its early stages. For most social games DAU (daily active users) and MAU (monthly active users) are important to achieve critical user reach and engage them to retain the DAU/MAU count and grow. The Facebook platform has a captive audience presence that makes it an appealing marketplace to launch such games. With more players getting hooked on these games, they continue to build cities, farms, slay dragons, and dig for gold on their PCs and mobile devices. Measured by metrics like ARPU, these players start spending small chunks of money that becomes a significant revenue stream over a period of time. As real revenues can be delivered by critical insights consequent of understanding user engagement and in-game behavior, it becomes imperative to constantly analyze the social activity of the numerous users. Social Gaming andsocial analytic companies must essentially measure the success of these games on a regular basis.
The social-gaming-market represents immense opportunity for marketers, and in the coming months there are bound to be more marketers muscling into the social gaming space through brand marketing tactics such as display ads, video ads, custom games, in-game enhancements, product placements and sponsorships. The social gaming industry is definitely starting to generate real revenues, and it is a marketplace that could soon constitute a good chunk of the social e-commerce market.