Social Gaming Creates Big Profits

Econsultancy, the leading source of independent insight on digital marketing and e-commerce released a 38-page report as a guide to understanding the social gaming landscape. The report concluded that 19 percent of consumers are now playing social games online.

Aliya Zaidi, Econsultancy's Research Manager explains why this is exciting to online gaming businesses, "Gaming is one of those sectors that has emerged from the social media landscape and is now showing rapid growth, thanks to the explosion of social networking technologies."

"The social gaming space is exciting because even in its relative infancy, it has shown itself to be highly profitable and to deliver strong return on investment, largely thanks to the sale of virtual goods and currency. The sector is an attractive area of investment for forward-thinking marketers," Aliya Zaidi concludes.

The report concluded that, while this is an emerging market, the typical profile for a social gamer is neither typical nor stereotypical of a hard-core console gamer. In fact, women are playing social games on average 2 percent more than men are. Thirty percent of the gamers surveyed (approximately a third) reported playing social games several times a day while 26 percent reported playing several times a week.

One of the key findings of this report is that the players who buy virtual goods or virtual currency are on the rise. Twenty percent of social gamers have paid to play a social game and 22 percent have paid for goods. Oddly, men are more likely to pay for virtual goods and services more often than women are.

For companies that are looking to expand their platform this sector is now worth close to a billion dollars. The easeability to purchase and use virtual goods in small increments allows for massive profits. If a fifth of the users on Facebook (using Facebook's statistic of 500 million active users) paid 99 cents for one product on your social game, the game would profit $99 million. Moreover, the expansion of social games to mobile phones, using the same Facebook example (Facebook statistic of 200 million active users) a social gaming company can profit $39.6 million for virtual goods. Of course, social games are not limited to Facebook. However, when you look at the profit potential it seems social gaming and the e-commerce that goes with it will continue to flourish.

London. Econsultancy. "New Report: A fifth of consumers playing social games online" Press Release. 7 Jan 2011 http://econsultancy.com/us/press-releases/5359-new-report-a-fifth-of-consumers-playing-social-games-online