Facebook Gaming Will ‘Crash Very Hard’

By James Brightman

Facebook has attracted numerous traditional game developers to “switch sides” to the social games space – a sector that has truly blown up in the last couple years. Zynga, according to some estimates, is worth more than $10 billion. Denis Dyack, founder of Silicon Knights, is not a believer in social games – not personally or commercially. In fact, he thinks social game makers will be in for a very rude awakening in the future when the industry’s bubble completely bursts.

We asked Dyack if the rise of social and the migration of traditional talent to the social space is a detriment to the traditional games market. He answered, “It is damaging traditional gaming for sure but… how it’s going to work out is anyone’s guess. The trend that I see is it’s probably going to be one of the biggest bubbles and explosions that our industry’s seen in a long time and I think when it crashes it’s going to crash very hard. I don’t think there’s an economy there.”

That would imply that the mighty Zynga and other top social game makers are doomed, but Dyack didn’t want to get into specifics. He thinks the amount of money invested in social is foolish, however. 

“I don’t know about Zynga – I think that’s a big micro, but I think that the amount of venture that’s being poured in, in general, that’s most of the video game industry investment. As far as I know right now, it’s going into pure social gaming. It looks like marketing to me. It doesn’t look like real gaming. And maybe it’ll change, I don’t know. It looks very, very dangerous. I think Zynga’s valuated more than some traditional publishers right now that have been in the industry for decades. I’m sorry, but I just don’t see it. It seems imaginary to me… it doesn’t look long term healthy to me,” he continued.

“And right now you’re seeing a lot of influx in venture and you’re seeing a lot of excitement and a lot of pie in the sky ideas, but when games actually have to start showing pure revenue and real ‘here’s how much we made and here’s how much it cost’ …I think that industry is going to not last very long.”

Traditional publishers, with the exception of EA (which bought PlayFish), have been slow to jump on the social bandwagon. Activision in particular has been roundly criticised by industry pundits for essentially ignoring social and mobile. Dyack believes that other publishers actually are more aligned with Activision than we think but have been reticent to state their stance on social.

“I think there are a lot of publishers out there that don’t agree with it and they just haven’t spoken about it,” he said. “I don’t see Nintendo going into that space, as an example. There are a lot of publishers that I don’t see going into that space. And, you know, EA is one of the few that’s [embraced social]. Just to be clear – there’s a difference between experimentation and [committing to the space]. So if Silicon Knights said hey, we’re going to throw 3 or 4 people on a social game and see what happens that’s very different than me saying, ‘hey I think that’s going to be really successful.’

“You know, we may do that in the future but it’s kind of like an experiment versus ‘this is our business model.’ I tried playing FarmVille, I really did, but it’s not my cup of tea. And I’m not saying that FarmVille‘s a bad game but as a gamer who’s played games all my life, I know what kinds of games I want to play. I play games every day and I’m always trying new stuff. Our golden rule is we make games that we want to play ourselves and I just look at those [social] games and those are just games I don’t want to play for whatever reason. I just think that they’re not a good use of my time versus quality.”

Do you think Dyack is on to something? Will the whole social games industry come crumbling down?