Social Media

Behind the Boomlet in Facebook’s Social Gaming


Facebook’s next target? Core gamers hooked on intricate action and strategy offerings such as Microsoft's “Halo,” pictured

Photograph by Patrick Fallon/Bloomberg

Facebook’s next target? Core gamers hooked on intricate action and strategy offerings such as Microsoft's “Halo,” pictured

Wait, social gaming isn’t dead? Yesterday Facebook (FB) bragged about a 24 percent increase in the number of users clicking away on Zynga’s (ZNGA)FarmVille 2 and a rash of new offerings from more obscure companies. Now about one in five Facebook users—some 250 million people—play games on the social network. That data is impressive—and certainly not lost on the hundreds of developers crafting the next Candy Crush Saga (Facebook’s third most popular game).

On the other hand, the numbers aren’t out of step with the rest of the company’s metrics. For example, Facebook posted a 25 percent gain in monthly active users last year, an increase that mirrors the growth in gamers.

Here’s why Facebook is so excited. Every time a user buys a virtual cow with actual dollars, Facebook gets a cut, sometimes as big as 30 percent. In the second half of 2012, the company’s “payments revenue”—which comes almost exclusively from game-playing—climbed a commensurate 26 percent.

If one assumes about 200 million Facebook gamers on average last year, the company collected about $4.05 apiece in payments revenue. Meanwhile, the network’s ad revenue breaks out to $4.04 per user. In other words, gamers are roughly twice as valuable compared with the nongaming user.

All of this underscores the importance of Facebook’s next target: the core gamers hooked on intricate action and strategy offerings such as Microsoft’s (MSFT)Halo. Facebook is cooking up 10 or so graphic-rich games with third-party developers this year, according to Reuters. It’s an attractive prospect in the company’s bid to keep its users hooked; it’s also a lot harder than tending a lo-fi farm.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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