Inside Social Apps 2010: Social Gaming Has an Even Bigger Future

Our Inside Social Apps 2010 conference kicked off this morning with a panel of top social gaming executives: Peter Relan, chairman of CrowdStar; Keith Rabois, executive VP at Slide; Vish Makhijani, COO of Zynga; Kavin Stewart, VP of product at LOLapps; and John Pleasants, the CEO of Playdom.

Our own Eric Eldon moderated, and got some interesting answers from the panelists about monetization, international markets, the next big hit and more. Full edited interview notes are below; we’ll start off here with a recap of the high points.

Note: You can check out tweets from this and other conference sessions via the #isa2010 hashtag on Twitter.

Most of the panelists agreed that 2010 will bring better social features and potentially more complexity to social games, along with more options for asynchronous interaction between players. Right now, players don’t directly interact and have little effect on each other. Synchronous interaction is also a possibility, but not all of the panelists agreed that it should be a feature in social games.

Independent developers have a tougher future ahead. In 2009 and earlier, many of the top developers were small independents who shot to the top with viral hits. Now that Facebook has changed its policies to discourage the most viral features, the independents will need to find financing to pay for advertising and other marketing, as well as the engineering ability for challenges like making more complex platforms scale.

There is, however, a large undeveloped market remaining: the international market. None of the panelists felt like they had really mastered the international market yet, and they even had different visions of how they should profit from international users — Keith Rabois of Slide, for example, said that his company is most interested in seeing users in developing countries create virtual goods that can be sold to users in developed countries.

Another potential way for an independent to break in — or for an established company to reach a new level of growth — is the possibility of a “network effect” through Facebook Connect, according to Peter Relan of CrowdStar. By using Connect, social game companies could potentially create a huge community outside Facebook, that is nevertheless enabled by the social network. This is already starting to happen with Zynga’s FarmVille.com, which now has millions of monthly active users off of Facebook.

Finally, there was an interesting question from Dean Takahashi of Venturebeat about whether Zynga could be worth $5 billion, as SecondShares.com recently speculated. The answer: yes, it very much could be. The panelists are all expecting huge growth over the coming year, making social gaming even larger than the existing $1 billion market we’ve estimated.

Here are the full edited panel notes:

ISG: When FB took away 3rd party notifications, what did you do?

Vish: We focused more on just delivering content. Changes may result in a dip in traffic, but people come back one way or another. We’ve found a relatively high replacement effect.

ISG: What’s your approach now to the market?

John: We’ve been growing a lot, so we’re trying to just catch up with ourselves — we have 9 studios now with their own mandates and budgets, and in theory they run almost like independent companies. Then there’s an intelligence center that focuses on monetization, analytics and so forth. Our smallest studio is around 10 people, the biggest around 45.

Peter: We’re differently organized. I’m not from the game industry, so I’d never heard of a studio before. We’re centralized, with one studio that builds all our games.

ISG: What are the big trends in 2010? So far we’ve seen treasure hunting, city building games — what’s next?