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Google Takes on Facebook Over Social Gaming

Posted on the 12 August 2011 by Periscope @periscopepost
Google takes on Facebook over social gaming

Social gaming like FarmVille is big business - and Google wants in.

it’s adding games to its fledgling social network.

The shots at Facebook don’t stop there. In an interview at VentureBeat, the Google+ team revealed that they will only be charging developers a 5 percent commission to build games for the platform, as opposed to the 30 percent that Facebook charges. As Google+ users wait anxiously for the new games feature to appear in their accounts, gaming looks set to be the next big battle front between the two online giants.

  • Why is Google getting into games? So-called “social gaming” is big business for social networks. An eMarketer report in January 2011 found that 53 million people in the US played games such as Zynga’s FarmVille in 2010, generating $856 million in revenue. That money is shared between game developers and the platforms that host them – meaning, in most cases, Facebook. Unsurprisingly, Google wants in on the action, and as Michael Arrington revealed at TechCrunch, the search company secretly invested $100 million in Zynga in July. “For whatever reason people love to play these games and get passionately addicted to them, coming back day after day,” wrote Arrington. ‘That’s helped Facebook become what it is today. Google, Yahoo and others want some of that magic to rub off on them, too.”
  • Facebook hits back. The dust had barely settled on Google’s announcement before Facebook hit back with some gaming news of its own. The company used its developer blog to launch several new features designed to increase engagement with games on Facebook, including bigger sizes for game apps, real-time updates on high-scores and achievements, and better controls for filtering out information about unwanted games. As Matt Rosoff commented at Business Insider, “The goal is to keep developers excited about building games for Facebook.” Will it work? According to Rosoff the changes are “nothing groundbreaking,” but that may not matter. “With more than 700 million users, compared with maybe 20 million for Google+,” he wrote, “social game developers have little choice but to keep thinking of Facebook first.”
  • Facebook under threat? However, there are signs that Facebook’s dominant position in social gaming is not iron-clad. Zynga, the breakout star of the industry that recently filed for a $1 billion IPO, has hinted that it would like to reduce its utter dependence on Facebook. “Facebook is the primary distribution, marketing, promotion and payment platform for our games,” the company wrote in its S-1 filing. “Any deterioration in our relationship with Facebook would harm our business.” Add to that the 30 percent cut that Facebook currently takes from Zynga’s revenues, and you can see why working with Google might be an appealing prospect. Research firm Experian Hitwise reported recently that Facebook “suffered a significant loss of market share of visits” in July and that its “dominance of the UK social market hasn’t been this low since October 2009.” Of course, Facebook is still number one by a long way, but things could be about to get interesting.

More on Facebook and Google

  • Does Anonymous really want to “kill Facebook”?
  • The stellar rise of Google+
  • Facebook users make for the exit
  • Facebook on the decline? Don’t tell this person – they’ve gotten their Facebook friends tattooed on their arm
  • Facebook for under-13s? Zuckerberg thinks so

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