Video: Social Gaming Executives Predict the Future of the Industry in 2010

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By Eric Eldon Comments

What will be the most significant changes in social gaming this year? We joined a panel of social gaming executives last night at a packed event in the Googleplex in Mountain View, California to discuss. Our overall conclusion? We’re mostly quite optimistic. Check out the video to watch us make our predictions.

We also got a chance to hear from product leaders at Orkut, the Google-owned social network that’s big in Brazil and India. While the site is facing competition from Facebook and other services, like Twitter, it continues to be a big and under-appreciated opportunity for social game developers. It has 80 million monthly active users, the single largest majority of whom are between 18 and 24 years of age. While a range of your usual range of games have gotten big on Orkut’s developer platform — farming, aquarium care, etc. — there are only a few of them. As competition increases on Facebook, Orkut can be a good place for companies to gain additional traction, experience and revenue.

Here are the prediction panelists:

– Daniel James, Co-founder and CEO, Three Rings
– Wilson Kriegel, VP of Business Development and Ad Sales, Outspark
– Lisa Marino, Chief Revenue Officer, RockYou
– Mark Rose, Director of Product, Payments and Platform, Playspan
– Jonathan Flesher, VP of Business Development, Zynga
– Eric Eldon, Editor, Inside Social Games

Ali Moiz, chief operating officer at social market research and monetization company Peanut Labs, moderated the panel. We didn’t get a chance to hear his predictions at the event, so he’s provided them to us, below.

1. Non-premium apps that generate “viral” traffic and make money largely off display ads will take a big hit as a category. There will be individual apps who figure out how to go viral, but in aggregate this category will decline atleast 25% in terms of MAUs.

2. Social games will be affected as well, though not as much as 1 since they can compensate through ad-spending and a higher % of returning users. Competition will heat up since there are less free/viral users to go around. Ad spend and user acquisition rates will increase, rewarding those developers with deeper content that monetizes better.

3. Friend app invites/requests will become largely ineffective. Their proposed placement according to current FB screenshots means they will be checked as frequently by users as “Updates” currently are in the Inbox, i.e. almost never. Expect this viral channel to become ineffective compared to today.

4. Developers will spam email en-masse in desperation, resulting in that channel becoming useless and ignored. Relevant email updates will likely get drowned out by email spam generated by other apps. Already there are email providers offering to “sell” Facebook emails collected from apps. I’ve been pitched rates of $150 per 1 million verified FB emails by 3rd-party vendors. At those rates, there will be massive spam flooding the system next month via email.

5. The newsfeed will be the main viral channel left for most apps. Apps will genuinely have to push out more relevant and highly engaging content to get exposure. Current newsfeed spam methods will become less effective when everyone starts spamming the newsfeed next month.