According to market research group Parks Associates, in less than five years the social games industry will be worth a staggering $5 billion.
The prediction would mark a five-fold increase over 2010, which saw social games earn around $1 billion in revenue. And according to the market research firm, the main reason for the explosion in revenue will be the improved monetization techniques implemented by game developers and publishers.
“The most powerful asset of social game developers is the quantity of behavioral data that they can obtain from their games,” research analyst Pietro Macchiarella said.
“The abilities to measure the efficacy of different gameplay mechanisms, to tweak game design in near-real time, and to test new models are advantages that traditional gaming companies will never have. Zynga’s huge market share is the best proof of the competitive advantage made possible by properly leveraging consumer data.”
Another potential boon for revenue will be in-game advertising, something we’ve already seen quite a bit lately across both the mobile and social spaces, with games like Angry Birds Rio and the Rango-themed missions in FrontierVille.
Parks Associates will be revealing its complete report on April 13 at theGame Investment Conference in Austin, Texas.