Ad Biz Talk Virtually Missing at Gamer Confab

Virtual goods have a bright future in the explosive social gaming segment. But does advertising? Not based on comments from several of the industry’s biggest players.Advertising was hardly mentioned during the early sessions of the New York Games Conference on Tuesday (Sept. 21), as several analysts and industry leaders laid out their predictions for the gaming industry over the next few years. When the subject of monetization came up, virtual goods and other forms of microtransactions were mentioned as the primary business model for social games—at least in the near term.Yet there was little doubt among gaming experts that social gaming—already a mass medium onto itself—would continue to grow exponentially. According to Atul Bagga, director/senior analyst, ThinkEquity, a whopping 55 percent of Facebook users play games. In addition, a stunning 40 percent of pageviews on Facebook are game related.“We are only just scratching the surface,” said Bagga. Among his predictions were that Facebook would soon start seeing more immersive, hardcore-type games that appeal to a more niche audience than Zynga’s massively popular Farmville, which is played by 65 million people each month. Plus, social aspects of gaming are spreading well beyond Facebook—to multiplayer games like World of Warcraft and console gaming, as more and more gamers connect their PlayStations, Xboxes and Wii’s to the Internet. Currently, the business model for most Web-based social games is a free-to-play model that encourages users to purchase virtual goods that enhance game play, or to pay for access to premium gaming content. But for games that users pay for in advance like console games, or subscription based games like World of Warcraft—the current monetization models are being challenged, since gamers play these games for much longer durations than in the past, said Bagga.“Users play the same game over and over again,” said Bagga. “You have people playing World of Warcraft for 150 hours....vendors need to monetize that [time]. A lot of people are leaving money on the table.” Yet perhaps tellingly, Bagga did not suggest advertising as a potential means of monetizing such prolonged game play.Nor did Steven Chiang, president, studios, Zynga, during a keynote interview later in the morning. Chiang repeatedly emphasized the free to play/microtranscations model, adding that the majority of Farmville users did not pay to play the game.Chiang said that Zynga was developing a slew of new titles but seemed to downplay the idea that Zynga was going to try and create deep, immersive, console-like titles. “We are looking for ideas that people can understand in about five seconds,” he said. When asked about the company’s relationship with Facebook, which has recently toned down the number of notifications users receive about their friends activities in Farmville, Mob Wars and the like, Chiang looked to dodge any controversy. “They want to create the best user experience for their customers,” he said. “We are all about the user experience.”

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Ad Biz Talk Virtually Missing at Gamer Confab

Mike Shields

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