Social gaming overview for brand advertisers as of sept 2010

1. Social Gaming Overview forBrand Advertisers As of September 2010 By Brian Groth Twitter: @BrianGroth http://BrianGroth.wordpress.com

2. What Is Social Gaming Any online game (PC, game console, web-based, mobile) with one of the following capabilities: Invite a friend to play the game with or without you Entice your friends to play the game by sharing your achievements Multi-player (synchronously or asynchronously) Purchase game items for a friend within the game Plus related to a social media service Some social games are on social networks, such as Facebook Some social games have added social networking to an existing casual game Some game environments encourage friends to play the same game by sharing achievements, such as on Xbox Live

3. But It’s More Than Just Games Play games with friendsand discover others toplay with Purchase virtual items and gifts for a friend in the game Purchase virtual items for yourself within a game to enhance your game play Purchase Facebook Credits or similar “currency” to be used in games

4. Facebook Credits Facebook is the biggest platform for social games, so Facebook Credits are an important part of the social gaming market You can buy Facebook Credits via credit cards, PayPal, Facebook Credits gift cards (purchased in a retail store) or mobile phone payments. You can also earn credits through special promotions. Facebook CEO Mark Zuckerberg spoke earlier this year about wanting to create a “level playing field” for social game developers on Facebook “Making it so that there is one currency that people can take everywhere levels the playing field a bit, which is good” Zuckerberg said. http://www.facebook.com/credits/ http://www.insidefacebook.com/2010/09/19/what-zyngas-switch-to-credits-means-for-the-facebook-ecosystem/ http://www.insidefacebook.com/2010/06/22/exclusive-discussing-the-future-of-facebook-and-the-facebook-ecosystem-with-ceo-mark-zuckerberg/

5. A Few Social Game Studios & Players Zyngais the biggest and pulls in $37M - $60M of revenue every month Mergers, Acquisitions & Investments: Each had monthly revenue of $1M each Disney acquired Playdom (up to $763M) – August 2010 Google acquired Slide ($182M) – August 2010, while Google also recently invested in Zynga ($100-200M investment) – Zynga is by far the biggest social game studio In late 2009, EA acquired Playfish (up to $400M) RealNetworksacquired Backstage Technologies Game Platforms / Social Platforms / Marketplaces: Microsoft’s Xbox Live (a social network), on Xbox 360 & launching on Windows Phone 7 this fall Apple’s Game Center, launching on iPad this fall Ngmoco Plus+, OpenFeint Facebook, MySpace Nintendo, Sony http://mashable.com/2010/08/17/social-games-business/ http://mashable.com/2010/04/08/apple-game-center/ http://www.internetretailer.com/2010/09/15/realnetworks-buys-canadian-social-gaming-firm

6. Where Are Social Games Being Played? http://mashable.com/2010/08/11/social-gaming-business/

7. Facebook & Messenger Levels of Engagement 45-minutes+ average engagement time across social games Social Gaming earns 10% of all internet time spent online Nielsen indicates that more people are playing online games than using email Farmville: 70M hrs/week http://marksilva.wordpress.com/2010/09/10/playdom-enters-the-magic-kingdom-part-2/ http://mashable.com/2010/09/10/farmville-vs-real-farms-infographic/ http://socialgame7.wordpress.com/2010/08/03/social-games-surpass-e-mail-as-second-most-popular-activity-on-the-internet/

8. TV Sized Audiences 100m US and UK social game players (over 200mm worldwide) Zynga’srecent hit, Frontierville, reached 5mm users in just 13 days Farmville has over 17.5M daily average users, 70M hours/week http://marksilva.wordpress.com/2010/09/10/playdom-enters-the-magic-kingdom-part-2/ http://mashable.com/2010/09/10/farmville-vs-real-farms-infographic/

9. Hollywood Movie Sized Revenues Zyngais the biggest and pulls in $37M - $60M of revenue every month Monthly revenue of $1M+: Rockyou, Crowdstar, Watercooler, Playdom(now Disney), Slide (now Google) Zynga raised $1M+ million in 5 days in FarmVille for the Earthquake Relief Campaign & $500k in 2 days for Schools in Haiti – all from 1 virtual good: Sweet Seeds Early evidence that Social Gaming dynamics can change offline behaviors (Foursquare, Facebook Places, etc.) and drive purchases http://www.freshnetworks.com/blog/2010/09/the-benefits-social-gaming-for-brands/ http://techcrunch.com/2010/01/08/farmville-zynga-charity-virtual-goods/ http://techcrunch.com/2010/09/21/sweet-seeds-zynga-raises-500k-in-two-days-to-build-school-in-haiti/ http://marksilva.wordpress.com/2010/09/10/playdom-enters-the-magic-kingdom-part-2/ http://mashable.com/2010/09/10/farmville-vs-real-farms-infographic/

10. http://mashable.com/2010/09/10/farmville-vs-real-farms-infographic/

11. http://www.onlineschools.org/blog/social-gaming/

12. Winning at Social Gaming Keys to Success: Social games require a platform, content and distribution just like any other successful game. Today, most social games are notsuccessful, but moving forward, almost all games will have a social hook Revenue Model for the game publisher: Despite isolated deals, the revenue engine for casual gaming isn't brand advertising but virtual goods: Game studios fear bringing in brand advertising could destroy the game experience The main hurdle for brand advertisers is that the biggest publishers are scaling just fine without ad revenue Brands & Social Gaming: Still very early days, but options include: In-game advertising Custom branded games Sponsoring existing games http://mashable.com/2010/08/11/social-gaming-business/

13. Winning at Social Gaming Keys to Success: Social games require a platform, content and distribution just like any other successful game. Today, most social games are notsuccessful, but moving forward, almost all games will have a social hook Revenue Model for the game publisher: Despite isolated deals, the revenue engine for casual gaming isn't brand advertising but virtual goods: Game studios fear bringing in brand advertising could destroy the game experience The main hurdle for brand advertisers is that the biggest publishers are scaling just fine without ad revenue Brands & Social Gaming: Still very early days, but options include: In-game advertising Custom branded games Sponsoring existing games moving forward, almost all games will have a social hook http://mashable.com/2010/08/11/social-gaming-business/

14. Top Facebook Applications Are Games & Top Facebook Pages Are For Games http://www.appdata.com/ http://pagedata.insidefacebook.com/

15. Top 25 Facebook Games for August 2010 http://www.insidefacebook.com/2010/08/02/top-25-facebook-games-for-august-2010/

16. Brands & Social Games

17. Examples of Social Branded Games Branded games offer more engagement with the brand compared to simply following the brand on Facebook or Twitter Examples of Custom Branded Games Hello Kitty (by Sanrio): A mass multiplayer game Battle of the Cheetos: Options to connect to Facebook, but not required Sony Pictures “Day X Exists” game based on the movie Salt, has multiple connection points into social networking sites (primarily Facebook) Examples of Branded Games on Facebook NY Jets football with the “Ultimate Fan” game Golden Nugget Las Vegas Casino, with casino games Harrah’s with their World Series of Poker game Honda is part of the Car Town game http://www.dayxexists.com/site/ http://www.forbes.com/2010/09/13/social-games-sanrio-technology-brands.html http://www.clickz.com/clickz/column/1724704/its-all-fun-games-brand-marketers

18. Examples of Brands in Social Gaming Women's blog network Sugar has built its own social game, Retail Therapy, with a number of marquee fashion brands. In the game, users design their own virtual boutiques and stock them with virtual clothes from Banana Republic, Barneys New York, Diane von Furstenberg, Gap, Juicy Couture, Topshop and Tory Burch Users have to come back at certain intervals to achieve tasks and can pay real money to speed up the process. Players pay up for virtual clothes: $1 to dress an avatar to $100 for stocking an entire store FarmVille recently launch its first branded crop, Cascadian Farm organic blueberries. In less than four days, more than 310 million blueberry crops were planted in the game and more than 1 million people purchased it during the campaign from July 19-26, 2010 http://adage.com/digital/article?article_id=145147 http://mashable.com/2010/07/22/farmville-organic-blueberries/

19. Recommendations for Brands Interested in Social Gaming Games in general, social or not, have a large and engaged audience that will continue to get more and more social. Brands should be part of this. Alignment: Align your social gaming plans with your overall brand strategy and goals. The social game plans may simply be part of your overall social plans too Test the Social Networks: Test a branded game in your Facebook or MySpace page or as a connection point from a branded game to these networks Test the Social Games: Look into the options for advertising within social games, such as FarmVille and others Advertise (Paid Media): Leverage existing in-game advertising to get your brand seen during game-play Leverage online banner and search advertising to drive a large audience to your social game efforts Measure, analyze and improve your advertising efforts in social games

20. Appendix

21. Game Dynamics / Mechanics A list of 47 of the game mechanics SCVNGR draws upon when creating games – many of which are social – a useful resource when building your own game Achievement Appointment Avoidance Behavioral Contrast Behavioral Momentum Blissful Productivity Cascading Information Theory Chain Schedules Communal Discovery Companion Gaming Contingency Countdown Cross Situational Leader-Boards Disincentives Endless Games Envy Epic Meaning Extinction Fixed Interval Reward Schedules Fixed Ratio Reward Schedule Free Lunch Fun Once, Fun Always Interval Reward Schedules Lottery Loyalty Meta game Micro Leader-Boards Modifiers Moral Hazard Ownership Pride Privacy Progression Dynamic Ratio Reward Schedules Real-Time v. Delayed Reinforcer Response Resard Schedules Rolling Physical Goods Shell Game Social Fabric Status Urgent Optimism Variable Interval Reward Schedule Variable Ratio Reward Schedule Viral Game Mechanics Virtual Items http://techcrunch.com/2010/08/25/scvngr-game-mechanics/

22. Sources for Social Gaming Info http://www.insidesocialgames.com/ http://mashable.com/tag/social-games/ http://en.wordpress.com/tag/social-gaming/ http://www.appdata.com/ http://pagedata.insidefacebook.com/ http://search.twitter.com/search?q=%23socialgames Twitter: @BrianGroth Blog: http://BrianGroth.wordpress.com