Social Gaming Revenue Valuable Acquisition for Big Media

By August 31, 2010

The latest big company acquisitions of social gaming startups points to a maturing of the market, as reporting from eMarketer today suggests. While the social gaming market's "explosive growth will moderate in coming years," majo

r media influences Google and Disney have become interested in incorporating these new business models into their own.

Google will be working with Zynga, who brought Farmville to Facebook years ago. According to eMarketer, Google has a social gaming property in the works and acquired social app maker Slide to help in this venture.

Similarly, Playdom was acquired by Disney, a sign that the animation and entertainment conglomerate is putting faith in the continual success of social-type gaming.

These types of gaming companies have two revenue streams - ad support adding up to $142 million this year, and virtual goods sales will make even more revenue, the combined total which ThinkEquity predicts will reach $2 billion by 2012. In their industry report from 2009, daily active users for the top ten social gaming companies has increased over five times from April to October of last year.

The popularity of gaming on social networks is demonstrated in the top-performing applications - twenty of the top 25 Facebook apps are games. A significant growth area remains in converting active playing users to active paying users - only three-to-five percent of active users directly pay for games. Newer payment methods may assist with this conversion in the forms of credits, prepaid cards and mobile payments.

Paul Verna, eMarketer senior analyst further explains the dual role of social gaming as culture and revenue. "Facebook was on the ground floor of this trend with Zynga, and other top companies such as Google and Disney are now jumping in," he says. In addition, this trend of consolidation is not over. Verna adds, “I expect other social networks, internet portals and entertainment companies to shift resources toward the social gaming space while they still see it as a potential money-maker.”

Legal mentions © L’Atelier BNP Paribas