And our top Person of the Year goes to Zynga's Mark Pincus. Arguably the biggest trend changing the games landscape is the rise of social gaming. While traditional video game publishers have been struggling to make a profit on games that typically cost anywhere from $20-$40 million (if not more), companies like Playdom, Playfish and Zynga are raking in money on micro-transactions from games that cost a mere fraction of a traditional video game and practically require no marketing expenditure, as they rely on the viral nature of social networks like Facebook and MySpace. There is no company that better represents this trend, or that has seen as much success, as Zynga. Controversy over “scammy” offer-based ads aside, Zynga CEO Mark Pincus has led his company to such success that industry pundits believe it could raise upwards of $1.5 billion in an initial public offering, if Zynga eventually decides to go public. Zynga has over 230 million monthly users and, reportedly, micro-transactions from these users drives Zynga to $200 million+ in annual revenues.
Social gaming is an absolutely massive opportunity for publishers right now, and they're starting to pay attention. It's why Electronic Arts bought Zynga rival Playfish and it's why we think Nintendo should leverage its development resources and IP to grab a piece of the social gaming pie. Between Facebook, MySpace and other social networks, there are around 600 million users, dwarfing all the consoles and handhelds combined. "Eventually I think more than half of the population of people who are socially connected will participate in social games," Pincus commented recently to Reuters. If he's right, that could mean an empire of 300 million social gamers, and it's one that Pincus is in prime position to control right now.