One of the biggest drivers of Facebook’s success has arguably been the rise of social gaming.
From Mafia Wars to Farmville, Facebook’s platform has become a virtual gaming console of sorts for millions upon millions of consumers, creating a multi-billion dollar virtual currency opportunity for Facebook that it’s exploiting with Facebook Credits.
But as Facebook gears up for its IPO, which now looks to be delayed, there are signs that social gaming on Facebook is peaking.
The largest maker of Facebook social games, Zynga, has been working hard to ensure that it’s not too dependent on Facebook. To that end, it not only built a non-Facebook destination for its games, it is trying to become a platform of its own.
Its strategy just might be working: according to Facebook’s latest S-1 update, Zynga contributed 15% of the company’s revenue in Q1 2012, down from 19% a year prior. While there may be numerous factors that contributed to this decline (and not all of them bad), there is reason for Facebook to be concerned.
The latest; CrowdStar, which was an early and prominent maker of social games for Facebook, is no longer producing games for Facebook. According to the company’s CEO, Peter Relan, CrowdStar will “maintain” its popular Facebook games, which include Happy Aquarium, but is now “100 percent focused on mobile.”
The reason: mobile may be a more attractive market for younger, tech savvy gamers, as well as older players — two large groups which often aren’t playing games on Facebook (or even on PCs or gaming consoles). And it’s one the company appears to be having some success with, having passed the 20m download mark for its Social Girl and Modern Girl iOS and Android games.
While time will tell whether Relan’s belief that the Facebook gaming audience is not growing much anymore and may even be shrinking is accurate, CrowdStar probably isn’t the only gaming company looking at mobile. And for good reason: it isn’t lost on those in the industry that OMGPOP, which went from the launch of its smash hit game Draw Something to a nine-figure acquisition by Zynga in a matter of weeks, was originally focused on producing games for Facebook. If OMGPOP hadn’t shifted its focus to mobile for Draw Something, it might not have even survived as a company.
Mobile’s rise is not good news for Facebook. If other players in the social gaming space start to adopt a mobile-first or mobile-focused strategy, the social network’s best days may be behind it.