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Overseas opportunities could help grow F2P market to $7.5B, says analyst

Overseas opportunities could help grow F2P market to $7.5B, says analyst

March 20, 2012 | By Eric Caoili

Global revenues for free-to-play games on browsers and social networks could more than double to $7.5 billion by 2016 (mostly from virtual goods purchases), compared to $3.2 billion in 2011, according to analyst firm DFC Intelligence.

In a new report titled "The Market for Browser and Social Network Games," DFC forecasts that much of that growth will come from outside of the U.S., where it believes the market for social games has not yet reached saturation, and where major growth opportunities for developers are open for the taking.

The group predicts that one of the biggest opportunities lies in companies creating their own network or community separate from Facebook, as Zynga plans to do with its Zyna Platform.

German developer and publisher Bigpoint (Battlestar Galactica Online) is an example of a free-to-play game company that's pursued this strategy, and it's managed to pick up 250 million registered users along the way.

DFC president David Cole sees fewer opportunities in the States: "While the global F2P market is quite diverse, Zynga and Facebook have dominated the market in the U.S.

"Despite major investments in the browser and social network games space from companies such as Electronic Arts and the Walt Disney Company, Zynga has only increased its dominance of the Facebook game market in the past year."

Cole also warns against developers saturating the market with too many copycat products, and causing overall consumer fatigue. He says user retention rates for copycat free-to-play titles have been falling rapidly shortly after their release.

Online game consultant and Turbine (The Lord of the Rings Online) veteran Jess Mulligan adds that publishers need to offer something different to retain users, which will mean higher development budgets for those companies..

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