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Sunday, 11 May 2008

Gaming: Far from a Solo Gig

Last week a brand-new video game, Grand Theft Auto IV, racked up US$500 million in sales -- in one week.

Last year online gaming attracted 28 percent of the total worldwide online population -- almost 217 million people.

This isn't just fun and games. This is big business.
Play With Others

Meanwhile, another major trend is sweeping the online world. Social networks have grown enormously, as this map shows (it's in French, but you should get the point). These networks have added a new element to online games -- a social aspect. Social gaming combines games and social networking to allow you to involve your friends in your games. This may be as simple as comparing scores or issuing challenges, or as complex as real-time multiplayer gaming.

The types of games can be unexpected. The most popular game on Facebook is Scrabulous, an unlicensed version of the board game Scrabble. Scrabulous became so popular that it caught the attention of Mattel and Hasbro, which own the rights to the game. They wanted to shut it down, despite that fact the Scrabulous had probably introduced Scrabble to a completely new demographic.

Social games might be multiplayer games that you can play with friends on your favorite social network. But some companies are looking to those free casual games as being a core component of something bigger -- and a revenue-generating business, too. Companies like Mytopia and J2Play are building communities around the games, and spanning multiple social networks, which means that you can play games or issue challenges to your friends across different networks. And in a world of applications that grows more crowded every day, it provides an opportunity to discover new games.

Other Up and Comers:

Mytopia, based in Silicon Valley and Israel, has released eight games across Facebook, Bebo, and MySpace, as well as Web and desktop widgets. The games allow players to join teams, send instant messages, collect points, virtual currency, and trade in-game items. Mytopia is considering sponsorships, premium subscriptions, and other methods of revenue generation. They expect to open their platform to developers this month.

J2Play (Disclosure: I have done consulting work with J2Play) has taken a somewhat different tack. Rather than host the games, it provides a platform for developers of existing games to add community-based features to their games, including collecting credits and badges, issuing challenges and chat features, as well as showing what games your friends are playing and allowing you to invite them to the game. A simple tool allows you to enable your game for Facebook, Bebo, MySpace, Hi5, and Orkut, in less than five minutes. They plan to extend this to PC and mobile games as well. Revenue models include advertising, micro-transactions, and potential upselling of non-web-based games.

Other companies in the social gaming space include Social Gaming Network and Zynga. The market has even spawned its own conference -- Social Gaming Summit -- focused on increasing social interaction within games.

The uptake of environments such as Second Life, as well as both social networks and online gaming, shows that there is a large group of people with a desire to connect online with others, and plenty of disposable income to spend. Smart companies can capitalize on this growing group by providing a place to discover, connect, and play. Along with a little friction-free commerce.

Update: Just after publishing this, I learned that Shawn Fanning, of Napster fame, has sold his social gaming network startup Rupture to Electronic Arts for $30 million. This market is obviously being taken pretty seriously already.

Larry Borsato has been a software developer, marketer, consultant, public speaker, and entrepreneur, among other things. For more of his unpredictable, yet often entertaining thoughts you can read his blog at
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Posted by: aroeltsm, Updated at: 5:01 am

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