The explosive growth of the Facebook games business has left a small number of companies with a lot of cash.
Zynga has raised $54 million. Playdom has raised $43 million and Playfish now has the resources of a billion dollar public company, Electronic Arts (ERTS).
And that doesn’t even include the “forget I ever mentioned widgets,” late-to-the-party big money raisers like Slide and Rock You.
Why might this be bad news for anyone else trying to break in?
- Your game will be cloned. These companies have massive studio resources at their disposal and any game not created by them that starts to gain traction, will be quickly cloned, improved and brought to market. Case in point, there are no less than 5 competing acquarium games, as well as multiple farm games and restaurant games. The losers are the small pioneers in the genre. They did free research for the big guys to validate a concept.
- All your installed user bases belong to us. With massive amount of installed users and daily active uniques, the big guys can relentlessy cross promote games. And if you hold Playfish cash in Pet Society, you will be able to take it elsewhere to spend.
- Advertising. Facebook is a fantastic platform on which to advertise Facebook games. Significant upticks in DAU’s are usually correlated to aggressive ad spends. A couple of guys who whip together a fun game on Facebook will eventually lose to someone who can clone it and spend $50 million to promote it.
So what can game developers do to adapt?
- Build solid game brands that can’t be cloned. A game like civilisation with built in name recognition and brand equity can stand on it’s own. People will want the Coke in this case, not the RC Cola. Bold prediction: Civilizationville will not be as popular.
- Have an off Facebook presence, built-in loyal community, and engagement through Facebook Connect or a Facebook Fan page. While its a stretch to imagine a company like Threadless creating a game, if they ever did, their loyal community would probably stick by it, even after someone else created a Threadlessville clone.
- Build games with well told stories and meticulous game balancing. If the Facebook games audience grows up beyond simple text based RPG’s and economic sim games, the creativity and skill required for a more complex game will give companies a more defensible position. In console video games and even movie genres (every studio and network needs a vampire picture) the time to market on these clones never displaced the original innovator. It simply took too long to get the copy out to market.
Dan Porter is CEO of multiplayer games site OMGPOP.