Google+ Games: Analysis and Opportunities

In mid-August, Google announced the launch of Google+ games integrated directly into the search giant’s new social network. Silicon Valley consensus is that Google is finally making a direct attack at Facebook and that company’s commanding lead over social networking; the inclusion of social games, which comprise much of Facebook’s own user activity, seems confirmation of that strategy. Ted Simon of Kabam, one of the developers in Google+ game’s pilot launch, told SocialTimes Pro the company’s so far seen a promising response by Google+ users to its complex strategy games with a deep social focus: “Based on early returns, we're pleased with how things are going so far for our two titles on Google+ games, Edgeworld and Dragons of Atlantis,” Simon told us. “Those are both hardcore social games, not casual games, and Google+ gamers are responding to them well. That's an indicator that members of our primary audience, core gamers, are residing on this platform.” As Altimeter’s Jeremiah Owyang sees it, Google+ is an opportunity for game developers simply by being a relatively large social network: “All social profiles are key for game developers, as they can tap into existing networks for increased ability for login and registration,” he told SocialTimes Pro. “Secondly, by using existing friend networks they can increase the chance of content, scoreboards, leaderboards, and sharing of virtual goods.” In the estimation of comScore’s Andrew Lipsman, Google+ will need about 20% total market penetration to establish itself sufficiently and grow organically. “[Once] a site reaches 20% penetration in the U.S. for example,” he explained to SocialTimes Pro, “the network effects tend to strengthen and propel it higher.” (Lipsman noted that Facebook, and before it MySpace only, reached critical mass upon reaching this level of market penetration.) “That means 35 or 40 million users in the U.S.” According to comScore, Google+ had about 6 million monthly U.S. uniques at the end of July. So while Google+ is showing strong growth in its early months, it will probably still need tens of millions more in the U.S. alone, before becoming an attractive platform for game developers. Flurry’s Jeferson Valadares did offer cautious advice for developers interested in Google+: “I think if you manage to get support from Google it might be worth taking a chance,” he told us. For those developers who do wish to pursue this opportunity, Valadares had this recommendation: “Be ready to figure out monetization for yourself since Google Checkout penetration is not particularly high,” he told us. Related to this (and based on Flurry’s analysis of iOS and Android app monetization), Valadares recommended that Google game developers “not rely 100% on Google Checkout and to find out alternative ways of making revenue such as Trialpay or find some other payment providers in parallel.” What’s incumbent on Google, Will Harbin, CEO of leading hardcore social game developer Kixeye, told us, is this: “They need to prove they have traction that makes it worth our while... Meanwhile, life as a game developer on the browser and Facebook is quite good.” He went on to argue that for his company at least, Facebook’s 30% commission on revenue is more than compensated for by the social network’s large user base. “We didn’t see any change in revenue [since switching to Facebook Credits].” Harbin added that the company has been increasing month-over-month in revenue, even with Facebook’s 30% take. At the moment, Google+ has no key market differentiator to Facebook, in great part because it has branded itself as a network for real names and identities, which is also the core branding identity of Facebook. This cedes enormous advantage to Facebook and, in SocialTimes Pro’s view, misses a tremendous market opportunity: To become the social network that can also appeal to all those who wish to share content with the many individuals in their extended, Internet-based social circles, via hundreds of millions of pseudonymous identities. By a very rough estimate, there are about 200 million of these in the West alone, a great many from Twitter, YouTube and other social media platforms, and perhaps as many associated with gaming platforms, such as the online service Steam (30 million) and virtual world games such as Habbo Hotel, Gaia Online, IMVU, and Second Life (25 million+). Allowing and enabling pseudonymous identities would give Google+ a unique value proposition distinct from Facebook. And, because so many pseudonymous identities are associated with online games, such an offering could greatly increase interest and engagement with Google+ games in particular. Purchase the rest of this report here.

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Google+ Games: Analysis and Opportunities

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