Social games, virtual goods, and monetization opportunities: 3-part series with Uzi Arbiv

This is a 3-part series about social games, virtual goods, and monetization opportunities.

Part 1 comments on the current casual gaming climate
Part 2 will outline the essentials and a check list for monetizing a social game
Part 3 will discuss user acquisition through in-house marketing campaigns, Cost Per Install, and alternative monetization platforms.

Part One:

So, how many applications do you already have on your Facebook profile?

Here is the average check list:
One farm, a dance club, gun collection, possibly a restaurant, a football team, an empire and the list just goes on and on.

According to AppData.com, if you add up the amount of monthly active users of the top 10 Facebook developers’ apps you will hit a staggering 533,736,605 users.
This number is even more significant when you consider the potential of additional studios and game developers that grow their activity everyday on Facebook.

Each month these users log in, play, and share games with their friends. Moreover – they purchase virtual goods.

For me, 2010 will be remembered for officially creating an additional niche within the online games world – Social games is officially head-to-head with MMO’s (massively multiplayer online games)  and casual/skill games.

Who is the big winner here?  The virtual goods players.

How can we tell?  Here are some observations of the casual gaming industry’s huge influence:

Lingo: ARPU (average revenue per user), social media, LTV (lifetime value), CPI (cost per install)… No longer buzzwords, they are being implemented into new start-ups as well as established business models.

FB: The huge migrations onto Facebook strengthen two main and somewhat obvious factors:

• Social Media & Social Games are not a seasonal trend
• Virtual items-based business models are efficient & profitable while subscription is slowly fading out.

Acquisitions: We are witnessing the ongoing acquisitions of gaming studios and developers for hundreds of millions of dollars, with the main goal being better games and an interactive and localized user experience, creating a feeling of true value for the users (which leads to spending).

Appeal to Users: As a result of the recent growth in the social gaming arena, users can find relevant and intriguing games easily.

So I leave you with the question: “What must game developers and games creators understand to stand out in the industry?”

In Part Two, I will outline the essentials and a check list for monetizing a social game.

Author Uzi Arbiv is the Director of Sales for the performance marketing arm of Adsmarket.  You can contact him at uzi.a@adsmarket.com

See Uzi’s other post:

Virtual Currency – Media Types for Online Games Applications