With the impending Zynga IPO, the Facebook games space has perhaps never been so hot. But is it a real business? Is it all played out? Can you still make money from Facebook games?In a word: yes.
We spoke to industry insider Mathieu Nouzareth, who co-founded not one but two successful Facebook games companies, one of which is publicly traded in Paris.
“I think it’s still the best startup opportunity. I don’t know any other online market that allows for this kind of growth and profits. Not even the iPhone,” he said. “It’s a dream business.”
But wait, isn’t the Facebook platform a huge risk, and isn’t Facebook limiting how viral games can be? It’s not as good as it used to be, Nouzareth said, but it’s still great. “And, there’s only one thing worse than being on Facebook–not being on Facebook.” And there are new platforms coming up like Google+.
Don’t you need to be able to spend tons on ads to have a big game? Not so, Nouzareth says. It’s once a game is already working that you can spend on ads to boost its growth. But marketing spend on a game that doesn’t work, well, doesn’t work. For example, one game they launched, Crazy Cow Music Quiz, got 5 million users on just $8,000 in advertising, he says.
Ok, so there have to be some downsides to the business? Yes. You need tons of disparate skills to pull things together. There’s three aspects you need to get right: creative, technology and analytics (to see how and why a game goes viral/people buy goods). It’s hard to find the people and build the teams that can pull off all those three things together.
“It’s very hard to make a good game, and you need a little luck, but when you make it it’s very profitable,” Nouzareth says.
Bottomline: despite all the big boys like Zynga, EA and Disney-owned Playdom, there’s still lots of room for lots of smaller guys to make lots of money with social games.