Earlier in December, MediaBistro, a leading internet media company, hosted a Social Gambling and Gaming Summit at the MGM Grand in Las Vegas, which brings together casino-style social games, mobile gaming, virtual goods, and helps bridge mainstream social gambling and gaming.
Social gaming is one of the fastest growing industries in the gaming market. Approximately one third of internet users in the US are social gamers which is driving the growth of the Social Gaming Market in the US at a CAGR of over 24 percent for the 2012-2016 period. In addition, there is a huge opportunity for the vendors in this market to attract and retain potential gamers since internet penetration is very high in the US.
So what is Social Gaming?
Social gaming refers to the playing of online games on social media platforms, network sites, or within social media applications. Social gaming hit the mainstream in 2009 with the development of Farmville, a collaboration between Facebook and Zynga Inc.
Following the success of Farmville on Facebook, social gaming became increasingly popular around the world, and the Social Gaming market in the US in particular is viewed as a growing market from which vendors can generate additional revenue by launching better and more creative games. For instance, games such as Candy Crush Saga and the FIFA series immediately witnessed an increase in their gamer base following their launch on social media platforms in the US.
Perhaps the most prominent (and often most overlooked) genre of social gaming is internet gambling. Even before the age of Candy Crush and Farmville, online gambling sites offered free online casino games like poker, where users could interact and play collectively. However, as social gaming moved from computers to mobile devices, vendors took advantage of the possibilities of on-the-go gaming, effectively pushing internet gambling to the back burner to make room for the ever-increasing array of mobile social games.
Major market players like Zynga, King (owned by Midasplayer.com), wooga, Social Point and Electronic Arts (EA) have all developed a wide range of social games, catering to many different audiences. In fact, 9 out of the 10 top grossing apps currently listed in Apple’s App Store are games:
- Candy Crush Saga (King)
- Clash of Clans (Supercell)
- Hay Day (Supercell)
- The Simpsons: Tapped Out (Electronic Arts)
- Game of War- Fire Age (Machine Zone)
- FANTASICA- TCG card game (Mobage)
- Big Fish Casino (Big Fish Games)
- MARVEL War of Heroes (Mobage)
- Zoosk- dating app (Zoosk)
- Slotmania- FREE Slots (Playtika)
What may surprise you is that all of these top grossing games…are free.
So how exactly are these vendors making a profit?
The answer is in-app purchases.
The curiosity and high passion shown by gamers for gameplay triggers their need to discover and play the next stage of a game. To do so, gamers have to spend a certain amount of money to make in-app purchases of virtual goods, such as coins and various avatars, to discover the next stage of the game.
An average US gamer spends approximately US$ 70 at a time purchasing virtual goods when gaming, which is almost more than double the amount that an average Asian gamer would spend. In addition, more and more people are using mobile devices like smartphones and tablets as a gaming platform. Currently, roughly 100 million consumers use smartphones and an additional 92 million consumers use tablets to make online purchases. The convenience of being able to play a game on-the-go has in turn increased the likelihood that a consumer will make an in-app purchase.
As a result, many social gaming vendors have developed their own virtual currency, which is used to buy virtual goods within social games. The rise in the use of virtual currency in recent times has been due to the increased demand for virtual goods and different avatars during social gaming. Social gamers also spend real money to purchase virtual goods such as coins, magic wands, houses and swords. Therefore, the increasing demand for virtual currency is expected to fuel growth in the Social Gaming market in the US in the years to come.
For more information, view our 2012-2016 report on the Social Gaming Market in the US.
You might also be interested in:
- Advanced Analytics in the Social Gaming Industry 2012
- Global Mobile Gaming Market 2012-2016
- Social Commerce Market in India and China 2012-2016
- Global Mobile Application Market 2012-2016
- Global Gaming Software Market 2012-2016
