The Future of Social Gaming

Representing a third of total social networking direct revenues, there is a substantial growth opportunity in the still fragmented social gaming market. Various players including major entertainment companies are becoming more involved in the space. This report profiles the online social gaming market, explaining current positioning, historical development, drivers and inhibitors, and future opportunities. It contains detailed data on the current and forecast market size globally, by user numbers and revenue generated, with data breakdowns by region and for key countries. It analyzes the competitive landscape across the value chain.

Scope of this research
• Access current and forecast data covering the global number of online social gamers, by region and demographic group.
• Quantify current and forecast data covering online social gaming revenue by region and major country.
• Assess the structure of the global online social gaming market, including key drivers and inhibitors at all levels.
• Understand the competitive environment among developers and service providers, and analyze key player's competing strategies.
• Find out what major players in related media and games categories are doing to gain from the social gaming opportunity.

Research and analysis highlights

As of 2010, there are almost 600m social gamers – and we expect this number to continue rising, albeit at a progressively slower rate. China made the greatest contribution to total player numbers in 2010, with 109m players – the US was second, with 95m. We expect these numbers to rise to 273m and 150m respectively by 2015.

The global social gaming market was worth just under $1.5bn in 2010, and is forecast to reach almost $4bn in 2015. The most important market is the US, with revenues of $670m expected to grow to $1.2bn in 2015. Japan is in second place, with a $180m market that is forecast to reach $570m in 2015.

The Big Four leading games developers – Zynga, EA, CrowdStar and Playdom – have tended to dominate the Facebook social games rankings. However, fifth-placed Digital Chocolate is only a few million users behind CrowdStar. Zynga is far larger than its competitors, with 195m active users across its titles, compared to second-placed EA’s 39m users.

Key reasons to purchase this research
• Who are social gamers? What will the social gaming market be worth in 2015 and how will it break down?
• What does the social gaming industry value chain look like? What are the USPs of a successful social game?
• Which countries/regions present the best opportunities for social gaming investment?
• How can media /gaming companies use their skills to benefit from the social opportunity?
• How much does the social gaming market depend on Facebook’s goodwill? What is the future of the social gaming market?

Global Video Game Industry

Table of Contents
John Band 2
Disclaimer 2
Executive Summary 11
Introduction 11
Social gaming market context 12
Social gaming consumer analysis 13
Social gaming revenue analysis 14
Social gaming competitive environment 15
Stakeholder profiles 16
Future areas in social gaming 17
Chapter 1 Introduction 18
Summary 18
Introduction 19
Who is this report for and what is it about? 19
Defining social gaming 20
Notes on data and sources 21
Chapter 2 The social gaming market context 23
Summary 23
Introduction 24
Development of the social gaming market 24
Historical background 24
Platforms 25
Value chain 26
What makes a successful social game? 27
Factors promoting and restricting the growth of social gaming 30
Drivers 30
Social network growth 30
Demographic trends 30
Heavy promotion from content providers 31
Emerging platform opportunities 31
Inhibitors 32
Concerns over trust and security 32
Social networking fatigue 33
Highly 33
Restrictions on viral opportunities 34
Chapter 3 Social gaming consumer analysis 35
Summary 35
Introduction 36
Number of users by region 37
Number of users by demographic group 42
Networks for older consumers represent an opportunity 45
Demographic breakdowns by geography 47
Australia 47
Brazil 48
Canada 49
China 50
France 51
Germany 52
India 53
Indonesia 54
Italy 55
Japan 56
Mexico 57
Russia 58
South Korea 59
Spain 60
UK 61
USA 62

Chapter 4 Social gaming revenue analysis 63
Summary 63
Introduction 64
How social games generate revenue 64
Advertising and sponsorship 65
Virtual goods 66
Pay-to-play/subscriptions 66
Social gaming market value 67
Revenue and growth 68
Growth as a proportion of total social networking revenues 71
ARPU growth 72
Chapter 5 The social gaming competitive environment 74
Summary 74
Introduction 75
Platform environment 75
Social network users by platform and region 75
Platform analysis 79
Developer environment 81
Payment solutions environment 84
Implications for existing gaming and media companies 86
Chapter 6 Stakeholder profiles 88
Summary 88
Introduction 89
Social networking platforms’ gaming positioning 89
Facebook 89
QQ.com (Tencent) 91
RenRen 92
Friendster 93
Twitter 94
Orkut 96
MySpace 97
Hi5 98
Kiaxin001 99
CyWorld 100
Mixi 101
Social gaming developers 103
Zynga 103
Playdom (Disney) 104
Playfish (Electronic Arts) 105
CrowdStar 106
SGN 106
Booyah 107
DeNA 108
Media and gaming companies 109
Activision 109
Apple 110
Google 110
Ubisoft 111
Other media players 112
Chapter 7 Future growth areas in social gaming 113
Summary 113
Introduction 114
New directions in desktop social gaming 115
Emerging social networking platforms and geographies 115
Impact of technology changes and HTML5 116
Involvement of major media companies 117
Developments in mobile social gaming 118
The evolution of smartphone gaming 118
How the iPad and future clones affect social games 119
Home TV and console social gaming 120
Console networks and their applicability to non-traditional gamers 120
Connected TVs 121
Appendix 123
Scope 123
Methodology 123
Primary research 123
Secondary research 123

Table of Figures
Figure 1: The recent evolution of online social network games 25
Figure 2: Social gaming users by country (m), 2010-15 37
Figure 3: Top 10 countries’ share of all global social gaming users (%), 2010-15 38
Figure 4: Global number of online social gamers by age group (% population), 2010 43
Figure 5: Global number of online social gamers by gender, 2010 44
Figure 6: Value, value growth and user growth in major social gaming markets, 2010-15 67
Figure 7: Global social gaming revenues by top 10 countries, 2010-15 ($m) 68
Figure 8: Social gaming ARPU by top 10 countries ($), 2010-15 72
Figure 9: Global users (m) of major social networking platforms by platform and geography, 2010 76
Figure 10: Regional social network user share (%) by platform, 2010 77
Figure 11: Global top 10 Facebook game developers by monthly active users (m), Nov 2010 81


Table of tables
Table 1: Number of players of online social games by country (m), 2010-15 39
Table 2: % growth in number of online social gamers, by country, 2011-15 40
Table 3: Online social gamers as % of total population, by country, 2010-15 41
Table 4: Global number of online social gamers by age group, 2010 43
Table 5: Global number of online social gamers by gender, 2010 44
Table 6: Estimated average age of social network site users in the US, 2010 46
Table 7: Number of online social gamers by key demographic groups in Australia, 2010 47
Table 8: Number of online social gamers by key demographic groups in Brazil, 2010 48
Table 9: Number of online social gamers by key demographic groups in Canada, 2010 49
Table 10: Number of online social gamers by key demographic groups in China, 2010 50
Table 11: Number of online social gamers by key demographic groups in France, 2010 51
Table 12: Number of online social gamers by key demographic groups in Germany, 2010 52
Table 13: Number of online social gamers by key demographic groups in India, 2010 53
Table 14: Number of online social gamers by key demographic groups in Indonesia, 2010 54
Table 15: Number of online social gamers by key demographic groups in Italy, 2010 55
Table 16: Number of online social gamers by key demographic groups in Japan, 2010 56
Table 17: Number of online social gamers by key demographic groups in Mexico, 2010 57
Table 18: Number of online social gamers by key demographic groups in Russia, 2010 58
Table 19: Number of online social gamers by key demographic groups in South Korea, 2010 59
Table 20: Number of online social gamers by key demographic groups in Spain, 2010 60
Table 21: Number of online social gamers by key demographic groups in the UK, 2010 61
Table 22: Number of online social gamers by key demographic groups in the USA, 2010 62
Table 23: Global social gaming revenues by country ($m), 2010-15 69
Table 24: Global social gaming revenue growth by country (%), 2011-15 70
Table 25: Global social gaming revenue as a % of total social networking revenue, by country, 2010-15 71
Table 26: Global social gaming ARPU by country ($), 2010-15 73
Table 27: Global users of major social networking platforms by platform and geography (m), 2010 78
Table 28: Social networking platforms user share by geography, 2010 (% of social networking users) 79
Table 29: Global top 20 Facebook game developers by monthly active users (m), Nov 2010 82
Table 30: Global top 25 Facebook games, by title, publisher and monthly active users (m), Nov 2010 83
Table 31: Facebook key facts & gaming strategy 89
Table 32: QQ.com/Tencent key facts & gaming strategy 91
Table 33: RenRen key facts & gaming strategy 92
Table 34: Friendster key facts & gaming strategy 94
Table 35: Twitter key facts & gaming strategy 95
Table 36: Orkut key facts & gaming strategy 96
Table 37: MySpace key facts & gaming strategy 97
Table 38: Hi5 key facts & gaming strategy 98
Table 39: Kiaxin001 key facts & gaming strategy 99
Table 40: CyWorld key facts & gaming strategy 100
Table 41: Mixi key facts & gaming strategy 102