The Social Game Changers

Once considered the red-headed stepchild of the gaming industry, social gaming is finally taking its rightful place at the table. Over the past several years, the free-to-play (F2P) model has surged to the forefront of next-generation gaming, while console game companies and traditional game developers have faltered by the wayside.

With its risk-free adoption, discoverability, and virtual goods format, the F2P model demonstrates how billions of smaller transactions, coupled with lower go-to-market costs and data-driven design, offer compelling game experiences to a market segment the traditional gaming companies persistently ignored.

Facebook is the dominant platform of choice for large social game developers like Zynga, Playdom, Playfish, Crowdstar, PopCap, and Kabam, among others. The ability to tap into a social graph of more than 750 million users to leverage network effects and shared interests has allowed the F2P business model to explode onto the gaming scene within a veritable blink of an eye.

User analytics have also changed, evolving from measuring and optimizing applications that sent hugs and vampire bites to games that had more complex game mechanics like Zynga’s “FarmVille,” the current linchpin of big data’s social gaming success. Today’s emerging social Web has the potential to leapfrog even Zynga’s accomplishments as it expands beyond the traditional social networking platforms.

Tectonic Shift

Viral growth no longer means frequent news feeds or spammy invites. Instead, it’s a more developed player request that’s embedded with progress mechanics. Monetization has gone from a fragmented, company-specific currency to an ecosystem of native Facebook credits. As a result, developers are retuning their games and earnings expectations around this new, 30 percent revenue share model.

With all of these rapid platform changes, a shifting advertising ecosystem, and the blossoming of new game engines and genres, analytics companies have had to keep their finger tightly on the market pulse in order to correctly anticipate the next level of visibility and insight.

From optimizing around virality (K-factor) a year ago, the focus has shifted to engagement and retention optimization, as we see games with deeper engagement narratives pushing the envelope in leveraging custom behavioral insights to create games with ever-increasing average revenues per user. This raises the bar for everyone in the space and leads to higher quality game experiences that benefit the entire industry.

Social Gaming Evolution

Facebook’s success as a social gaming platform means more and more competitors are actively working to accommodate social game developers and their ad budgets. Google+ is currently the latest potential rival to Facebook, both as a social network and as a social gaming platform.

Mobile social networks like Openfeint are attempting to create networks within the fragmented mobile ecosystem. Venture capital keeps flowing into the industry with new studios popping up almost every day.

Industry veterans from traditional game companies are jumping ship, recognizing the new epoch where both the medium and the means players have for influencing the development and direction of their experience are completely unlike anything the industry has ever seen before.

Social and mobile game companies are also witnessing an explosion of data that’s both technically challenging to process and intellectually challenging to translate into smart business decisions. Critical, real-time decisions now mandate seeing games not as a product but as a service — a service that is constantly tweaking and optimizing the user experience for both new and existing players. Developers must quickly make sense of this data deluge in order to successfully iterate and capitalize on opportunities arising from user behavior.

The Evolving Social Web

As fluency for interpreting sizeable data sets increases, so will the number of events a developer will want to measure in gaming applications. Analytics must adapt to this fluency, to begin commensurately scaling for these new and unforeseen demands.

Many big data companies will try to step in to provide these services, recognizing that whether it is a social game, website or an application on a PC, smartphone or tablet, they must go where the users are going in order to build a holistic and accurate picture of cross-platform user behavior.

As more non-gaming companies perceive how Zynga leverages sophisticated analytics for data-driven design and optimization, the demand for similar analytics platforms will explode. Mobile devices are the next arena where exponential growth is already happening and companies have already introduced products specifically built for the mobile developer.

Successful social analytics companies will continue adapting. They will move beyond the on-demand dashboards to provide not only the infrastructure that handles the next generation of social Web data but also the common-sense best practices for executives navigating this new, opportunity-filled field.

For far too long, the Web has struggled to make sense of users by applying metrics that were mere proxies of player behavior. As the social Web expands, a paradigm shift based on previous user behavior metrics will follow. The analytics company that best packages, distills, and helps its clients understand how to better monetize users within the paradigm will gain the biggest share of this new market.

Accessible and actionable insights; these are the goals analytics companies must achieve in this evolving Web ecosystem. We must reach beyond page views into user behavior to better understand what drives people to play and interact within their games and their social and interest graphs.

We must deliver flexibility for measuring user behavior, while also delivering the best practices discovered in our years of research and data mining that organizations can interpret and act on.

Finally, we must move with the social graph as it progresses from its social network beginnings into the wider Web. By doing so, we will be where people buy and share real-world items on their PCs and mobile devices, while also acting as a catalyst for discovery and influence through these shared interests. In short, companies need to understand their users — and we need to understand what companies need to know about their users. After all, we’re in this game together.

Jeffrey Tseng is CEO of Kontagent.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Technewsworld Channels