Jay Aird, co-founder of social analytics company dystillr and Karma Gaming, examines how a small developer can grow in a crowded Facebook market.
It's no secret that the success of social gaming has led to a major influx of competition. While barriers to entry remain relatively low, the barriers to achieving success are a different story.
Today, Facebook game developers find themselves in an increasingly competitive environment dominated by a few major players. Production values have gone up, as have platform and acquisition costs. It's a hits-based business where you need not just a great game to win, but also a deep understanding of how to use the Social Graph.
Given these challenges, is it too late for smaller developers to find success on Facebook? We don't believe so. What we believe is developers targeting Facebook need to spend more time thinking about the business of games and be more strategic in how they choose to compete.
A good starting point is with a thorough analysis of the Facebook market. In this feature, we'll provide a high level analysis of that market and explore techniques developers can use to quickly and efficiently determine where and how they can compete and come up winners.
What is happening in the market overall?
What's happening within the overall Facebook environment? While many reports suggest social gaming has peaked, the absolute figures in terms of the player base indicate otherwise. Across all games on Facebook, there are currently 153 million daily active users (DAUs), a 28 percent increase over the past 12 months.
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Growth genres versus declining genres
A valuable strategy developers can use to increase their opportunity for success is to focus on games in genres that are experiencing rapid consumer uptake or, alternatively, in genres that are under-represented. While Facebook games on the whole have gained users over the past year, the fortunes of different types of games have varied widely.
Simulation-type games (FarmVille-style), which once commanded an overwhelming majority of Facebook game players, have lost significant market share. The simulation game genre peaked in January 2011 with an aggregate 400,520,000 monthly active users (MAUs) and has fallen 34 percent since that peak to an aggregate 262,944,143 MAUs as of October 2012.
While still the largest genre in terms of monthly active users, simulation-type games peaked in January 2011 and are currently in decline. Growth on Facebook is now being led by genres such as gambling & casino, puzzle, and card & traditional. Click for larger version.
So how has the overall ecosystem grown in size while simulation genre games have fallen so sharply? The answer is the market is becoming more diverse, which is driving new growth. In particular, growth has been driven by puzzle-type games and gambling and casino-themed games. Together, these game genres reach over 50 million daily active users, an 86 percent increase over the past year. Notably, this figure now exceeds the 39 million daily active users across the once dominant simulation genre.
We can see the market is evolving from a simulation genre-dominated ecosystem to an increasingly diverse games market. This trend is being driven by the consumer's demand for more diverse game experiences on Facebook, a positive for smaller, specialized developers looking for opportunities.