Lifespan of Social Games Gets Shorter, Uncertainty Impacts Investment
By David Tobia
October 19, 2012
October 19, 2012
- The social gaming space has become increasingly crowded, and customer attention spans for games have become shorter.
- This has resulted in a dangerous scenario for game developers, as investors do not want to put money into a game when the life span can “be clocked with an egg-timer rather than an old-fashioned desk calendar,” writes Fortune.
- Robert W. Baird & Co. researcher Colin Sebastian notes that while the social gaming market is still growing, the pace has slowed considerably, and the uncertainty inherent in the genre makes it a tough sell for investors. “Games are a hit-driven business,” he says, “so it’s really hard to have a crystal ball and know what games are going to be successful and for how long.”
- Zynga’s purchase of OMGPOP for $200 million underscores the uncertainty in social gaming. Zynga wanted OMGPOP’s hit game “Draw Something,” but just as Zynga bought the game, the user base tanked, as users got bored and moved on to new games.
- PopCap Games has also struggled since Electronic Arts purchased the company in 2011 for $1.3 billion.
- “We’ve seen a dramatic change in the way people play and pay for games,” explains PopCap founder John Vechey. “The change in consumer tastes requires us to reorganize our business and invest in new types of games on new platforms — it’s a completely different world from when we started.”
- Analysts warn against the acquisition of “one-game companies” like OMGPOP because of the quick turnover in what games are popular at any given time. Other analysts suggests companies should hire individual developers rather than companies.
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