FarmVille, Who Will Do the Harvesting? - Steve Yanovsky - MediaBizBloggers

A recent article in The Washington Post stated that "more than 200 million people play social games every month, and the numbers grow by the thousands every day". The article went on to say "that on Facebook… 40 percent of the company's 500 million users regularly play social games."

When I told this to my Boomer friends, they immediately asked, "Who has the time for that?" What they don't realize is that the generation behind them, and the one behind those people, choose to entertain themselves in a very different way than their parents. Much has been written lately about the median ages of the audiences for the broadcast networks. They all hover around the age of 50. So, the younger audience is turning its back on television and has found newer entertainment options.

The younger generations, i.e. people in their 30's and 20's are not locked into the linear entertainment options presented by television, and enjoyed by their parents. Even with pay-per-view, television is still pretty linear in its presentation.

Back to the social game players. With 200 million of them playing games on a regular basis, the developers have attracted the attention of some of the major media companies. Disney recently paid $563.2 million to buy social game developer Playdom. Zynga, the world's largest social game developer, is busy making acquisitions of their own and becoming more of a force.

Now that they have attracted these enormous audiences, the desire to monetize them is obvious. Currently, the game developers do not generate revenue from most of their visitors, and the opportunity to do so is inevitable. Marketers would love to communicate with an engaged audience that has chosen to spend their time on these web sites playing games with their friends. As reported, the demographics of game players go well beyond the stereotypical boys 12-17. There is a significant number of Moms who play these games daily, as well as every other key demo. Marketers get excited when they see this audience data.

Since they are not near maximizing revenue, the developers are faced with the choice of how to generate more income beyond selling virtual goods to players. Advertising is an obvious choice. Do you imbed ads in the games, do product placement, a la the 1990's, or do you charge for people to play? Like the cable television model, basic cable networks realize two revenue streams, sub fees and ads.

Will that hold up with gamers? As with watching video content, my guess is that players would rather sit through a pre-roll spot than pay a subscription fee to play. It will be interesting to see how successful Hulu is with Hulu Plus. Yes, there is content provided with this new service that isn't available with the basic service, but will the audience pay?

Game developers don't know yet where the line is that they don't want to cross. Will they chase players away by inserting ads? Can they resist the interest on behalf of advertisers, and their agencies, that want to get in front of these eyeballs? Once they start showing ads, there will be no turning back. Is a smaller monetized audience what they are really after?

Steve Yanovsky, a marketing and marcom consultant with Customer Focused Solutions, can be reached at steve@stevenyanovsky.com.

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