The social game dream is dead! No longer can companies rely on Facebook’s unwitting users to sit in front of a screen, dropping dollars on in-game items and clicking on ads just so they can watch a virtual farm thrive. The market for viral social games like Farmville is shrinking, just as companies like Zynga thought they were going to get rich on people’s addictive habits.
But wait! There’s still plenty of opportunity to take advantage of people’s addictive habits after all! That’s why Zynga, Big Fish, RocketPlay, and others are turning to the oldest type of social game on the planet: Gambling for real money. Why keep trying to reinvent the Mafia Wars wheel when you can just get people betting on football games and playing poker?
Zynga and the other social game makers will likely see their gamble pay off big according to new data compiled by SuperData. That analyst group’s latest report on “Social Casino Metrics” predicts that revenue from real money social game gambling will total $1.6 billion by the end of 2012. By 2015, the take will be $2.4 billion.
“Both small social game developers and large land-based casino operators are looking at this new space,” says SuperData VP Janelle Benjamin, “With declining margins in the overall social games segment, casino-style games offer a healthy growth potential.”
According to SuperData, the average social gambler is spending almost twice as much as the average social game player, $78 to $43 in July alone, a dead period in the year when most people are spending on activities rather than gaming. The bulk of spending is happening in the US. $660 million of all social game gambling revenue this year will come from the US’ more than 35 million active players (around 11 percent of the total population.)
If clicking on a virtual cow on Facebook wasn’t depressing enough, social games will now be the virtual equivalent of Atlantic City slot machines.
The expected growth of the social gambling market doesn’t necessarily mean that Zynga’s survival is guaranteed. Corporate upheaval may kill the company first. It’s bleeding executives right now. After its stock was crippled in August, chief operating officer John Schappert quit the company. Chief technology officer Allan Leinwand followed last week, and chief marketing officer Jeff Karp quit on Tuesday. Maytal Ginzberg, Zynga’s executive in charge of real money gambling operations, just joined the company on Aug. 31.
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