Opinion: Facebook's Evil Twin Dilemma

Watching Zynga and Facebook "getting along" in the press reminds me of the scene in the 1993 movie Army of Darkness where Ash struggles to separate himself from his evil conjoined twin. I wrote previously that the first generation of "social games" are really just Facebook parasites. They are games that nobody wants to play outside of Facebook. First-generation social games are designed for one purpose: to hijack the social graph machinery to virally promote themselves, providing just the shallowest amount of entertainment value to get their players to perpetuate them to their friends. The games can't survive outside their host social graph on their own merits. The point of making this observation is not to denigrate the many talented social game developers out there, but to make an important observation about the future of the phenomena called "social gaming."

The "new" phenomena called "social gaming" is new and remarkable only in as much as it became apparent that Facebook had stumbled onto some magic pixie dust that made games nobody previously wanted to play suddenly popular! The games themselves aren't able to stand on their own and it has proven surprisingly difficult for successful social game developers to translate the audiences their games acquire inside Facebook into direct customer relationships outside of Facebook. The reason for this is clear, only one new "social game" has actually been created and that is simply social networking itself. The primitive, difficult to monetize, text- and image-based medium that we consider social networking today is nothing more than the crude framework for a richer, more dynamic and highly monetizable social play experience that consumers apparently crave. The explosive demand for gaming on social networks is not evidence that people WANT weak, low production value games, nor is it evidence that companies producing these kinds of games have a bright future, especially outside of Facebook. It's evidence that social networks themselves are a really exciting and powerful new way for people to “play” and this discovery will shape the design, business and distribution models of ALL the video game business going forward.

The online, casual, semi-multiplayer, Flash-based game business had been around and growing healthily for many years before Facebook arrived on the scene. Hit "social games" like Runescape, Club Penguin and Adventure Quest gained their enormous audiences and revenues by pure organic virality without the help of a social network or marketing dollars to promote them.

I've heard many absurd claims about Facebook creating a new kind of gamer and this is simply false. Online gambling created the modern online casual gamer in the late 1990s. The online casino business trained millions of ordinary people to spend money online playing casino games. The leading gaming portals of that era, including MSN and Yahoo, acquired their casual game audiences with simple, free, multiplayer games like checkers and backgammon (social games?) and monetized them by selling advertising to the dozens of offshore casinos that thrived at that time. The modern casual game industry was born with the U.S. government crackdown on these portals for carrying casino ads around 2001, forcing them to seek revenue from other sources. The first paid downloadable "casual games" emerged because mass audiences had already been trained to pay for games via the Internet. It's no coincidence that the biggest hit causal game in history, Popcap's Bejeweled, resembles a slot machine game.

Online poker emerged as the next major online gaming trend with several hugely successful publicly traded offshore companies servicing the U.S. market’s incredible demand. In 2007, the U.S. government again cracked down on online gaming sites causing these companies to withdraw from the U.S. market. It's no coincidence that the first hit "social game" on Facebook was simply multiplayer poker at a time when other popular poker sites had withdrawn from the market leaving millions of eager poker players who also happened to be Facebook users hungry for simple, classic multiplayer poker. Enter Zynga...

The next generation of hit "social games" will take a very different form from the first generation. Facebook's reaction to parasitic gaming has, not surprisingly, been to block them from spamming their users with game invites and notifications. Facebook’s clampdown on spamminess will force the next generation of social games to achieve virality and market share on the basis of their content merit rather than their spammy virulence. I suspect that the first content creators to successfully adapt to this climate will be traditional casual game developers whose roots lie in Flash-based web gaming, intrinsic addictiveness and word of mouth virality. Simulation and Strategy games should also thrive online because they lend themselves well to deep scalable game play, virtual goods economies and low production values. The third generation of social media games will be traditional PC, Console and MMO games adopting social networking features and business models to improve their self marketing and replay value. This transition will take several years because of the inherent cost, risk and online distribution barriers to large downloadable applications.

But regardless of whether these future games are built by traditional game companies or nascent start-ups, their developers would be well-advised to design for this future reality. Too many of the games I see are simply aping the “lessons” of first-generation social games, optimizing for spam rather than engagement. That window is closed, and those who rushed into it when it was open will fail unless they learn how to create intrinsically addictive viral games that benefit from social network integration but do not depend on it for their success. If you don't believe me, make some popcorn and watch the rest of Army of Darkness to find out how the story ends for Facebook and Zynga.