Big Business needs to Face some hard facts

Aug 21st 2008 at 15:33 by Michael French

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For instance, at last month's Seattle Casual Connect conference, social games firm Zynga's whopping $29m VC investment dominated after-hours conversations at the events' parties. Similarly, just weeks later, one of the hot stories here on CasualGaming.biz was the accusation from Sega that the move of big business into the 'game for Facebook' space would send youth audiences packing. And the Scrabulous Scandal has been the mainstream press' Facebook staple story for some time.

But taking all these into account - including polar opposite things like the big-money investment in a (relatively) low-profile company already doing a roaring trade on Facebook, and the potential machinations of a games giant like EA - makes it clear to me that the social games market has already been won. Sega's Simon Jeffery is right - major games companies 'could kill' Facebook, but they won't. They couldn't if they tried. Users needn't worry about greedy companies walking all over their networks; and, likewise, those greedy games companies shouldn't bother with Facebook.

There's a few reasons why. The first is critical mass: a cursory glance over the mini-industry of games for social networks proves there are a number of major players already. Zynga wasn't the only company to secure a big investment - let's not forget SGN's own $15m VC boost in May and a subsequent further backing from Amazon founder Jeff Bezos.

Elsewhere, Playfish, Kongregate, Serious Business, Gaia Online and others round out the list of leading companies in the space - they are the Nintendos, EAs, and Activision-Blizzards of social games, precluding the chance for those traditional games companies to stake any major share in the area.

Secondly, and most importantly, the smaller-scale, perhaps scrappier, private investment mindset required for 'Web 2.0'-style games thinking just isn't in the lifeblood of the gaming giants. They are dinosaurs, slow to catch on to the lower-cost production patterns for Nintendo's Wii and have to justify their spending to investors and make crazy projections for ROI year on year.

Remember, Facebook itself went from nothing to something very big in just a short matter of time - that's the kind of magic Big Business is built on, but can't just reproduce. If there's one thing the Scrabulous Scandal has shown, it's that the moment big business starts trying to get involved in a service like Facebook - the power of which lies with its users - users don't switch off, they just look away, preferring to give their eyeball time and/or money to companies which have thought about them rather than the bottom line.

Don't get me wrong, Big Business can do casual - mass-market gamer-pleasing products like the Wii, Rock Band and Guitar Hero are successes for them because they are big, high-value, high-volume boxed products that rely on the marketing and distribution chain. But they might not be so comfortable with plonking a few developers in a room and letting them tinker with some ideas on the off-chance they might come up with something that everyone wants to put on their Facebook profile.