In June 2008 we were approached by what was to come a very large Social Gaming company with a view to buying us out. The numbers were big and there was huge temptation to take the money and run… it gave us a lot to think about.
At the time we didn’t class ourselves as a ‘startup’ but this last week has raised a lot of questions in my head again. With Zynga taking over Serious Business and rumours circulating about Microsoft lining up a $200m acquisition of CrowdStar the question is raised as to what’s a good strategy for Facebook development companies.
In the beginning it was simple – make a fairly simple HTML game that was interesting and let people interact with their friends. Watch it grow, sell some virtual goods and make some money. The most difficult part for developers was making sure that the game would scale (ie. That when you got 100,000 people into your game they were actual able to play without the whole thing crashing). Now the playing field has changed.
With EA getting involved by purchasing Playfish for what could end up being $400m, Zynga raising another $180m, RockYou taking $5om and Playdom another $40m there are some massive numbers flying around, and with that it’s getting harder and harder for smaller developers to make a real impact.
This isn’t anything new – just look back to the early days of browser based games and a similar thing happened… it’s just more prominent now as everyone has a Facebook account and so has easy access to games. Whether your 14, 40 or 80 you can play… and if it’s a good social game then you should be able to easily work out how. Login, click click click, visit friend, buy some virtual stuff, logout. Rinse and repeat.
So, how do you take on the bigger boys?
We’re fortunate in that we have a huge userbase to call on but for developers just starting out they’ll need to either get lucky or have some serious cash behind them. Facebook are making it harder and harder to ‘go viral’, so there’s a higher chance that the only option will be to buy users. This makes it even more important to make sure that your virtual economy is setup properly – after all, if you’re paying 10 cents for a user you need to know that, on average, they’ll give you at least that back in the long run.
I predict that over the next 12 months we’ll see a few major trends. Firstly there’ll be a decline of independent developers who haven’t raised any funding getting involved with creating Facebook Games. There will, however, be a steady stream of VC-funded startups creating engaging, fun applications which will take off and be ‘stolen’ by the larger companies. From there we’ll see a fight for top spot, lead by Zynga but with the likes of EA, Microsoft and others hot on their heels.
The key will be to diversify. Make a game and don’t just launch on Facebook in English, launch on Facebook in English, French, German and Chinese. Port it over to Bebo, Orkut, Yahoo!, Mixi and wherever else you can. It might need some tweaks and changes but it’ll be infinitely faster than making a whole new game. Also, get involved with other smaller developers. Between three or four smaller teams there’s potential to have access to 10 or 20 million users which really could be the key to driving up numbers.
Oh, and if you’re one of those smaller developers, get in touch- we’d love to work with you.