Facebook demands a piece of the Social Gaming action

Social game developers have been getting a free viral marketing ride on the Facebook gravy train - but this ride is about to come to a grinding halt.

Alongside the explosive growth of Facebook has come the amazing rise of social or viral gaming - a billion dollar virtual market of black sheep and mob gombas. People are crazy to spend a dollar here and there to acquire cute dresses or the right to play for just a few more minutes, something that's been pretty obvious in Asia for a while now. But there's been a looming cloud on the social gaming horizon - what happens when Facebook requires all the social games to use it's currency system for purchasing virtual goods?

Now it's being reported that Facebook's virtual currency system is imminent. "Imminent" in the sense that if this was your pregnant wife, you'd be barreling through red lights as she screams in your ear that if you tell her to breath one more time, she's giving you a vasectomy with a spork.

So all the social game designers are girding their loins in preparation for the bad news - and it's grim indeed. According to the reports, FB is taking a 30% piece of the action.

Tony Soprano would be proud. Or Steve Jobs, for that matter.

Clearly, the iPhone App Store is the model being watched closely. Since the iPhone debuted, developers have been complaining - quite loudly - about the 30% license fee Apple charges. That hefty slice of revenue greatly cuts into the profit margin of any small - or large for that matter - game developer who thinks they've got the baddest iPhone app in the room. It's the kind of fee that can strangle developers and shut them out of the market. To hear the naysayers, a percentage that large dooms the iPhone store to oblivion.

At last count, there just under 400 bazillion iPhone apps available.

So apparently the market has spoken on the viability of 30%.

What it highlights is the simple power of being in complete control of a platform with no significant competitors. In the console world, there's at least a semblance of competition between Sony, Microsoft and Nintendo.

But looking at the social games on Facebook - what options does a game designer really have? Even the mighty Zynga is beholden to the platform Facebook provides. Zynga is trying to test the waters with Farmville.com to see if they can ditch Facebook someday. But the initial results are sobering. 74 million users on Facebook versus 250,000 on their website.

For all intents and purposes, developers of social games are dependent on Facebook. When faced with the option of either migrating to something like MySpace - which is in decline (which is as good as dead in the business world) - or trying to build your own web presence and drive traffic to it, most developers will grumble and complain - and in the end, pay Facebook it's piece of the action.

So for the social gaming world, it's time to send big Marko his piece of the action. But cheer up, at least he's not breaking legs - yet.

- Sean Dugan really hopes he doesn't wake up with the head of Marc Pincus in his bed. 

Image by Alberto P. Viega under Creative Commons License

1 comment:

  1. Let it be known that Dugans in the game industry write with panache.