The winds of change at Electronic Arts have seen layoffs wrack the video game publisher, with studio members pink slipped from places like Visceral Games Montreal and its Los Angeles offices, all the way up to the departure of long time executive John Riccitiello. Perhaps the biggest change to EA’s business this spring though, is the shuttering of Playfish, the Facebook game developer EA acquired in 2009. Playfish and the six games the studio still ran on Facebook, including the once popular Pet Society and SimCity Social, will be closed in full by June. Are Facebook games dead? It depends on your perspective.
According to Facebook, the social network’s gaming world is still big business, despite declines in revenue over the course of 2012. Speaking with Gamasutra’s Mike Rose, Facebook technology communications manager Tera Randall said that the data shows a healthy, growing market. There are 250 million Facebook members playing games monthly over the network, an uptick from 235 million in October 2012. In terms of raw cash, there seems to be plenty. Facebook paid $2 billion to game developers operating on its network, with more than 100 developers pulling in over $1 million.
That huge number of developers operating on the platform is the problem for some major players though. While there’s still money to be made making and operating games through the world’s premiere social network, it’s an increasingly hostile environment to the big developers that dominated it during the boom years between 2008 and 2011. That the entire Facebook market is worth just $2 billion to game makers is likely a terrible truth for Electronic Arts and its shareholders. EA spent $300 million acquiring Playfish alone in 2009, and that doesn’t include the money spent on internal development at other studios like EA Mobile, and other massive acquisitions like PopCap Games.
Facebook is not a market for giants. The rise and fall of Zynga is even more potent evidence of this. That studio accounted for 12-percent of all Zynga’s revenue all on its lonesome in 2011 when it was valued around $11 billion. Today Zynga is valued at around $2.6 billion and its games are no longer the hottest thing on Facebook. They are, after all, competing against hundreds of small developers and a Facebook audience increasingly accessing the network via gaming rich mobile devices.
Is Facebook gaming dead? No. But the age of Facebook gaming business behemoths certainly is.