Gaming Arena Expands on Social Space: Facebook Gears Up for More

July 12, 2013, By Sanjeev Ramachandran

During the three-month period between January and March of this year, Facebook had reported its most successful phase as a game platform.

And, after realizing the huge potential of gaming, the social network is looking to involve more in this area.

Reportedly, Facebook had generated around $213 million revenue from games between January and March of 2013 and it shows 15 percent more revenue in the same period last year. Clearly, Facebook is doing well in gaming business.

Facebook

However, for Facebook, the revenue from the gaming business is relatively small while comparing it with its advertising business.

Usually, Facebook makes revenue when a user buys digital goods from a game developer on the web. It takes a 30 percent cut while purchasing such digital goods.

But when it comes to mobile gaming, the social network gets nothing as profit, as Apple and Google own the majority of profits.

But this is going to change very soon, as Facebook is determined to make profit from games. The social network is set to introduce a more strategic plan that attracts a variety of game developers.

When Facebook and Zynga loosened their contract, we thought it would hurt the social network. But in reality, Facebook is doing better than in the past.

Until now Facebook was not serious about gaming. Perhaps, games were just introduced to keep its users engaged.

According to Wedbush analyst Michael Pachter, with games, Facebook is trying to give more options to its users to stick on to the site. And, so far it has been proved true for a Facebook user. With the introduction of social games on Facebook platform, users were more active, happy and always come back for more.

Although this point of view is right, it is not going to remain the same anymore. Over the past couple of months, Facebook proved that it could make money from games, and on a social networking site gaming is broader than you would want to assume.

Even Sean Ryan, the social network’s director of games partnerships, declared that gaming business is a big category for the site, packing a huge potential.

Facebook is determined to attract a more diverse pool of game developers, and this will prevent the social network from depending on a single studio anymore.

There was a time when Facebook entirely depended on Zynga and the gaming studio had contributed 12 percent of Facebook revenues in 2011. But, last year, the social network witnessed a range of new games and a new set of developers such as Social Point and Pretty Simple.

Moreover, Facebook has enhanced its gaming division and included more teams across Europe, Africa, the Middle East and Asian regions unlike in the past when a small team in the US managed the gaming section.

By helping Zynga to make revenue in billions, Facebook proved that it plays a major role in making hit games. Apart from letting users share their gaming activities with friends, a few games compel players to involve their friends in the game too.

Also, Facebook offers a wide range of possibilities to game makers  and it is up to the developers to take advantage of all available channels such as News Feed, mobile, notifications, ads, and more.

Ryan admits that with News Feed like services, a game related item get exposed to over 1.11 billion Facebook users. So, it has the ability to convert a not-so known game into a viral sensation.

Recently, TechCrunch reported that Facebook will be publisher to a few small mobile game developers, possibly the social network would include its own app install add. And if it is true, then it would provide direct revenue to Facebook from mobile games in the future.

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