My full response for Campaign Asia:
Q: What has been the impact of social gaming on the general gaming landscape?
Gaming was always seen by people as anti-social, but social gaming has destroyed that myth. Social gaming – whether games specifically based on social networking sites (Such as FarmVille and CityVille), Massive Multiplayer Online Role Playing Games (such as World of Warcraft or Everquest) or Console Networking games (such as Call of duty: Black Ops or FIFA 11) have opened up gaming in a number of ways; it has increased the number of gamers (with a strong growth in older females), it has increased the number of gaming sessions (as people are encouraged to play with their friends, and it has also increased the duration of gaming sessions (as the previous limitations of computer based intelligence are now superceded by the ability to play against real people).
In short, it has provided a new dimension to gaming, a new relevance and greater consumer touchpoints – it’s not just about the old PC vs console battle, but the ability to play games in browser, in social network, on mobile and other touchpoints.
Q: What is the chief revenue driver for social game developers? How important is ad-based revenue?
In the old days, games were either freeware/shareware or paid products. Now, we have a broad mix of revenue opportunities: paid (buy the game for $x), subscription (per month $), paid updates (buy the new levels for $x), advertising based (in game displays or sponsorship), and increasingly in-game purchase (virtual goods such as clothes, weapons, and other virtual goods that make for a better in game experience). Mostly, gaming developers should be looking at a mix of these opportunities. Ad based revenue is at it’s best when incorporated into the game in an engaging way – rather than just using the game as a billboard for display ads.
Q: Does the advent of gaming via SNS mean that marketers need to rethink how they strategise their in-game advertising? How then should brands be engaging with social gamers? What are the challenges involved?
Yes – just as marketing communications need to be engaging and relevant, so does their integration into games – particularly how they will work in a highly social environment. The key is to recognise that you are not building a platform or a tool, but a community – and every decision should be made to encourage the satisfaction, enjoyment and interaction of that community. While many marketers are fearful of social media because they “lose control” of conversation, social gaming allows the marketer to create the world and set the expectations and actions of the participants. It’s a relatively more controlled environment.
Q: To what extent are game developers and brands partnering to build games that satisfy both consumers and brands?
One of the earliest examples of this was the Playstation game “Boxster Challenge” which was developed by Porsche to coincide with the launch of the original Boxster way back in 1997. It was more or less a completely immersive, highly engaging virtual test drive experience for the Porsche Boxster.
One other great advantage of gaming for marketers is that unlike movies or music, gaming sequels tend to get better, therefore it’s easier to predict and partner with successful gaming franchises. More recently, we’ve seen changes in the way marketers use existing gaming franchises to promote their products: H&M used The Sims to promote and sell their clothing in game and McDonalds in FarmVille. Snoop Dogg has sold over $USD700,000 in branded virtual goods.
The bottom line is – games are incredibly popular – marketers aren’t doing enough to partner with game developers.