Social gaming company Zynga had an outstanding 2011, leading to a well-hyped IPO in December. But Zynga’s biggest risk was always an over-reliance on Facebook, with most of its revenue and users coming from the social network. It’s now six months after Zynga’s IPO and its stock price has halved, currently sitting at under $5. That’s because many of its high profile gaming products are tanking.
At the time of its IPO in mid-December, Zynga had the top five games on Facebook by daily active users. But, according to app tracking website AppData, three of those five apps have declined dramatically in Daily Active Users (DAI) since then.
Dec 12, 2011
Jun 12, 2012
Texas HoldEm Poker
Words With Friends
All of Zynga’s main “ville” products have lost a lot of users over the past six months. None moreso than the previous leader in Facebook’s gaming category, Cityville, which echoed Zynga’s share price drop to fall from over 10 million to below 5 million daily active users.
All three Ville games have now fallen out of the top 10 Facebook apps by DAI. It’s not all bad news, as Zynga still has four apps in the top 10: Texas HoldEm Poker (3), Words With Friends (4), Bubble Safari (5) and Draw Something (6).
Of the four apps still in the top 10, only one has shown strong growth over the past month: a new arcade-style game called Bubble Safari, which has quickly amassed 6 million active users since its launch in May. In fact it’s currently the top growing app on Facebook, by total users.
Mercifully, for the average Facebook user, Farmville continues to decline – from 4.6 million DAI to 4.1 million over the past month. But of most concern to Zynga is Draw Something, the Pictionary-like game which it acquired for $183 million in March this year. Its usage has been falling ever since. Just in the past month, the daily active users of Draw Something fell from 9 million to just over 5 million. Zynga has attempted to stop the freefall by adding 12 languages to Draw Something this week, in order to entice more global users.
The main reason for Zynga’s stock price fall this week was a report from financial analyst firm Cowen and Company entitled “Facebook Gaming in Accelerating User Tailspin.” The report stated that Zynga’s social gaming daily active users declined by 8.2 percent to 54.2 million in May. According to Cowen analyst Doug Creutz, that’s because casual gamers are moving away from the Facebook platform to play games on their smartphones and tablets. However Creutz hedges his bets, by noting that Zynga is “aggressively pursuing mobile game development.” Accordingly, he has a “Neutral” rating on Zynga shares.
The upshot is that Zynga’s fortunes are still ultimately tied to Facebook – and vice versa. Social gaming is moving onto smartphones and tablets, which is also where Facebook wants to expand its social networking platform. The reality is that both Facebook and Zynga need to aggressively expand onto smartphones and tablets, in order to get their stock prices moving upwards again.
Source: Why Zynga is Shedding Users
More iOS-inspired features are coming to the Mac in OS X Mountain Lion, shipping next month for $19.99.
What’s new in Mountain Lion?
A notifications center (look out, Growl!), a reminders app, Game Center social gaming, voice dictation, built-in Twitter, AirPlay display mirroring and iMessaging. Plus “documents in the cloud,” an iCloud-powered document storage and syncing service. And a new service called “Power Nap” that keeps your Mac up to date while it’s sleeping.
This extends Apple’s move to annual OS X updates – also more similar to iOS than Mac or Windows. Since 2003, Apple had updated Mac OS X every two years or so.
For many coders, developing an app is a labor of love. Hacking SDKs and APIs and tying it to beautiful and functional user interface is a challenge that many developers relish. Like everybody else though, developers need to eat. To eat, one needs to make money. Herein lays the problem for many developers trying to put together mobile HTML5 Web apps: there are no simple avenues to monetization.
HTML5 development studio appMobi wants to change that, especially for game developers. Today, the company announced playMobi, a cross-platform HTML5-based game development, deployment and monetization software developer kit. playMobi facilitates in-app purchasing, analytics and social constructs for game developers.
appMobi is highly focused on the HTML5 ecosystem. The company’s primary goal for 2012 is to create an environment where developers will have an opportunity to make real money off of HTML5 apps. That includes creating new tools, like the controversial JQ.Mobi, or monetization tools like playMobi.
The interesting part about playMobi’s use of the 1Touch technology is that it auto-completes payments across platforms. So, for any in-app purchase, 1Touch will use either Apple’s iTunes, Google Checkout, Facebook Credits or PayPal on the Web. For developers, that is a useful tool through one API.
appMobi is also moving into other core competencies with playMobi, such as analytics and social gaming tools. This is a bit of a new tract for appMobi. The company thinks of itself as a cloud platform for HTML5 mobile Web apps more than a tools provider like Sencha or Zepto. Hence, appMobi’s bread and butter is value-added services like playMobi. In terms of games, appMobi CTO Sam Abadir said the company’s vision is similar to that of Zynga of how the market will play out. More than any other type of app, game developers need stickiness, virality and the ability to monetize off those two aspects.
Many developers wonder if HTML5 is ready for dynamic games. In our interview with Zynga Germany CTO Paul Bakaus last week, he said, ” there is no point in waiting for a certain spec to finish. You can just start using it right now.” Bakaus makes a good point. If you think you can use HTML5 to push the boundaries of apps and games right now, there is no reason to wait. Create your own tools or work with existing sets and see what kind of dynamic app you can put together. It can then be “wrapped” for cross-platform deployment on iOS or Android. Games are a little more difficult and time consuming in HTML5 but the benefits of writing once and deploying everywhere can be enormous.
playMobi is appMobi’s entrance into several different verticals where it did not have a strong presence before. It can now take on companies like PlayHaven or Apsalar with game analytics and provide insight into how users are actually interacting with design elements. playMobi is currently in beta and developers can apply here. Put it through the paces and let us know how it works in the comments.
There is risk here for appMobi. The company is betting its future on the notion that HTML5 apps will become the dominant (or at least a strong segment) of the app economy. As of right now, many developers are split on the usefulness of the spec and what can be done with it, especially for games. The “native versus Web” argument is not going away any time soon.
What do you think of appMobi’s strategy? By creating value-added services for HTML5 apps, can the company help forge the future for the mobile Web?
Fantasy Shopper is a social shopping game where players discover and share the latest fashion from real-world online retailers. It’s gained a lot of traction since it’s launch last October, especially amongst women and we’ve heard on the grapevine that it was piquing the interest of investors for some months since emerging from the European Seed accelerator HackFWD.
Today that intense interest has been confirmed with a first round of funding led by top tier venture firms Accel Partners and NEA (one of the key investors in Groupon) to enable it to build out engineering and expand into new cities other than London. With NEW co-leading the investment, clearly there is a big opportunity to scale in US cities and elsewhere. The investment is based on a convertible note not equity, which is standard practise when investors want in fast the round is hotly contested.
It’s understood that 15 high profile angels from the world for fashion, music, celebrity and tech investing have also participated in the round but Fantasy Shopper is not releasing those names as yet.
Fantasy Shopper allows users to spend fantasy money on virtual representations of fashion items, share those items – or even whole wardrobes of outfits – with their friends and then buy them either online or, more importantly, in real, physical stores. Retailers then use that information on users’ tastes to offer deals, discounts and specials. That’s a pretty new take on so-called “social shopping” and it’s proving to be a smash hit with UK women.
Figures aren’t available on numbers of users, but the startup claims to have increased its user base by 200% month over month, with members spending an average of 28 minutes on the site per visit.
“Fantasy Shopper brings together everything we love about social gaming and e-commerce and will generate real-time, real-world data that will be priceless to retailers,” said Harry Weller, General Partner, NEA.
Founded by Chris Prescott and Daniel Noz in the regional UK city of Exeter (yes, really)
In an interview at DLD, Sonali de Rycker, Partner at Accel Partners told me: “From what we understand, about a third of all offline retail is influenced by online activity. Anyone that can better enable that or develop a proposition that drives online to feline going to be big. We think Fantasy Shopper has a shoot at being that company.”
Prescott chimed in: “The big play is web to store – especially with the emergence of Near Field Communication in mobile phones, which is coming along. The big problem right now with offline stores right now is the cost of dealing with returns. ” He says that because users – women especially – can build outfits online and share them with friends first, they are more likely to settle on an outfit they actually want to buy and keep. “Fantasy Shopper make the returns rates almost redundant.” So focusing on physical stores is a a big deal with the site.
Right now the focus is on London but it makes sense to expand quickly to New York and then LA, SF, Paris, Tokyo, Singpaore etc.
After that the startup could even be applied to the long tail of local stores and shops.
The site has over 100,000 virtual items from 40 retailers in clothes, accessories and sports goods. Users collect up to 20 “Paydays” every day, which are boosts that keep the users’ notional wallets healthy.
Shortly after its U.K. beta launch in October 2011, Fantasy Shopper became the first non-U.S. based business to win the Amazon Global Startup Challenge, in a challenge that featured more than 1500 startups from 78 countries.
Social gaming has come a long way since your friend asked you to check out her farm on Facebook. Some estimates suggest that over a million developers worldwide are busily adding to the more than 50,000 games and applications already available on Facebook alone.
In 1994, the gaming world was taken by storm when Blizzard Entertainment launched World of Warcraft, which not only became their best-selling PC game but ballooned into 11 million active players in just 14 years. However, this is a drop in the bucket compared to what the current popular social games see on a regular basis. Zynga’s CityVille has been reported to have nearly 76 million active monthly players and there are at least 30 other games with over 10 million active monthly users right behind it.
Today, the scale of social gaming is staggering, and gaming companies and non-gaming companies alike are doing anything they can to get in on the social gaming craze. But there are significant, although nuanced, differences between the two most popular gaming platforms, Facebook and new entrant Google+. Before jumping into the fray, gaming companies should understand how these two platforms have evolved and the best ways to take advantage of their existing technologies/capabilities.
Key players in the social gaming realm
So far Facebook has carved out its place as the most popular social gaming platform — until Google debuted its own social network, Google+, earlier this year. Unsurprisingly, Google quickly announced the availability of games on Google+, marking the start of a heated battle for user attention and dollars in the social gaming space.
Google has not fully released APIs or announced its plans for virtual currency or revenue share on its new platform. So in the meantime, developers need to consider not only the new different technology and capabilities offered by Google+, but also the nature of this new audience. Both of these aspects may play an important role in attracting developers beyond the sheer size of the potential Google audience.
When Google introduced games to Google+, they also drew the line where games would and wouldn’t appear on their platform. Most notably, games on the site will not appear in users’ streams, and they are only visible when browsing the Games tab. This is in stark contrast to the early days of Facebook, where games quickly filled nearly everyone’s wall, regardless of their interest in playing them. It may be common sense now to keep games off in their own corner, but this move may have a big impact on the success of viral games on this new platform.
Strategies for game developers
By being separated from the rest of the Google+ experience, gaming companies will need to find new ways to attract non-gamers. Many companies with popular Facebook games indicate that very few of their players come from gaming backgrounds. By bringing non-gamers into social games, Facebook has expanded the pie for [any gaming company who uses their platform], which may prove difficult for Google+ to match. However, while there is still much to be revealed about the nature of the Google+ APIs and monetization processes, developers should go back to their roots and focus on game-play rather than attracting players. The best initial strategy for companies looking at Google+ is to focus on creating games that are worth playing, and therefore games that both gamers and non-gamers will seek out without the help of viral promotion through the Google+ streams.
Successful social games take first-time players and quickly reward them for every tiny achievement. Then the games gradually ramp up their complexity and the rewards. Within a few minutes, players will have learned their way around the game and have been rewarded enough to keep them engaged and looking for more.
It takes large and highly scalable systems to support tens of millions of users with such short attention spans and a high thirst for action. Social games spread virally, and a successful game may reach millions of users in just a day or two. To support applications at web-scale, developers for both Facebook and Google+ games need to be very aware of the resources required to support their users. With modern cloud providers, adding thousands of new servers is no longer difficult. Building an application that scales linearly to that degree, however, still is.
While first and foremost, companies need to deliver a seamless gaming experience that gives people a reason to play, arguably the most important part of social games is the social part. Game makers need to make good use of the API provided by social networks to lure in new players, add more interactivity into their games, and keep players coming back for more. One example of this on the Facebook platform is the use of special free gifts within the games that can then be shared with friends.
Enabling players to share in-game gifts with friends who may not otherwise be playing that game is a perfect example of the ubiquity of social games. The player gets the “karmic” reward for having given the gift, the friend receives a free gift, and the game maker likely just attracted one more player. Google+ game developers will be faced with similar challenges once more is known about the APIs and should consider what types of in-game rewards might be leveraged to encourage players to continue playing. For now, we may see Google+ games focus more on time spent in-game instead of the number of new players.
Innovation drives success
So what does this mean for the future of social gaming? Much like the rest of the web, the only constant is change. Companies will be wise to learn the ways of the ever-evolving face of social gaming. Getting and keeping the attention of the millions playing online games isn’t easy, but missing this opportunity will likely lead to nothing but regret.
What, then, is the right strategy for companies looking to make waves in the social web? It’s easy to get caught up in all the buzzwords like gamification, monetization, shareability and engagement, but we need to remember that the engine that drives the social web is providing experiences that are worth sharing in the first place.
Pinball machine photo by James Brooks
I work on a small creative team in Human Resources at Humana, and we’re lucky to have access to useful tools and the permission to autonomously scope out and prototype small ad-hoc projects. So last year, when our company began to learn about the Socialcast API, it wasn’t long before we started to think of ways to use the discussion data to help build and strengthen our internal community.
There were three main things that we focused on as people began to discover and use the platform:
- How to help people measure and monitor their level of participation,
- How to reward people for using the social features correctly, and
- How to help drive adoption and spread the word about the service.
After some quick ideation, we decided to make a kind of social gaming tool that would help with the three main goals. I mainly work in PHP, which is great for interfacing with an API but not always so great for interactive visual stuff, so Steve Hudson on our team brought his amazing Flash skills to the project to create something truly fun and engaging. Dubbed The Hive (a name that goes along with Humana’s internal branding for Socialcast, which is named “Buzz”), the service uses discussion data to build a visualization of people’s personal “hives”–rendered as honeycombs–which light up or darken to indicate their level of participation within the community. People also see some bees flying around their hives; these represent the people with whom they interact most often on Buzz.
To help rapidly build the community, we added our own invitation process, which sends out emails containing the equivalent of an internal affiliate link (which triggers a process that logs the invitation as accepted and redirects the invitee to the internal single sign-on URL to access the community) and awards “coins” for every new registration. Users can spend their coins on decorations for their hives. Finally, to help people become comfortable with social features like #hashtags and @mentions, we use the data from the API to award badges for using these features within Buzz. The response to The Hive has been excellent, and we think it’s helped a lot of people better understand the Socialcast platform and has helped build a solid community.
Rolling out other services
While The Hive has been our most ambitious project to date, I’ve also rolled out a number of smaller services as well. Buzz Map is a simple mashup of data from the Socialcast API, the Google Maps API, and our internal HRIS system. The service plots active community participants on a map, enabling people to better understand the scope of the community as well as to identify the most potentially influential people in any given location.
Buzz Words was something I wrote in an attempt to see if it would be possible to take a quick “pulse” of the community on any given day. I wanted a way to mine the flow of conversation for different topics without having to necessarily read or skim every post, so I made a simple ranked word list. Buzz Words shows words used, sparklines for their use throughout the day, and provides excerpts from messages that contain the most commonly used words.
We noticed early on that lots of people were using the platform to ask questions, which was great, but a few questions would sometimes sink to the bottom of the stream before the right people could notice them. Buzz Unanswered Questions uses the action data from the API to generate a quick list of questions that haven’t yet been answered, and the more helpful people in the community keep an eye on this service to ensure that nobody’s questions are ignored.
I created the Buzz Personal Inventory after several months of using the Socialcast platform, when I became curious about what my contributions looked like when grouped and viewed separately. I wanted a quick way to produce a clean list of my messages, comments, and “likes” without having to wade through lengthy discussions to produce a list by hand. The API made it easy, and I tossed in a quick Google Chart to view posting trends over time.
Later, after wondering about personal patterns in posting frequency and timing, I made Buzz Timing. This service uses the API to look at long-term message activity and render visualizations of message/comment density by time of day. I also added a chart to help identify trends by day of the week. Tools like this enable discovery of personal patterns within a social space, and I think it’s always interesting to see your participation reflected back like this.
Buzz Recent Active Threads is a simple view of the top 15 threads over the past five days. It provides a quick summary view of the author, message, when it was posted, and how many interactions the message has had. Clicking on the message opens it in Buzz. I wrote this as a quick way to see what people are talking about, especially when I’ve been away from the community for a few days and want to catch up at a glance.
I’ve really enjoyed using the Socialcast API to create these kinds of services. It’s a robust API that’s easy to use, and we wouldn’t have been able to provide these extra things for our community without it. We’ve been able to build games, explore data, and present useful information to people; and we’ve been able to do it all very quickly and without any headaches. Most of these items were developed within a lunch hour and with no budget. We continue to explore ways to use their API for rapid, lightweight development as our community continues to grow.