Google released its latest social endeavour, Google+, this week. Unlike Google’s past social attempts, Google+ is actually good, featuring a lot of what Facebook offers, Apple-inspired graphics, and a slick approach to friends and privacy (“Circles”). And according to Google’s blog, they’ve only just begun.
So, what’s next? According to someone very geekly who tipped off Engadget, the source code on the Google+ site suggests it’s Google Games and Questions. There literally is a reference to game invites in Google’s source code.
Games.com suggests that social game companies are already salivating about the prospect of Google Games for two reasons. One, as mentioned, it actually doesn’t suck. And two, Facebook has not exactly endeared itself to game companies lately. Facebook is in quite a strange place for games.
On the one hand, Facebook single handedly created the social games and virtual items market in the US, the latter being something no one predicted would ever work in America. The biggest social games company, Zynga, which grew entirely through Facebook’s viral channels, reportedly could raise $2 billion and be valued at $20 billion in its upcoming IPO.
On the other hand, Facebook has irked social game companies in the past year by removing a lot of viral features from its social network and planning to force all game companies to use Facebook Credits and pay Facebook 30% of all transactions, as of June 31 (right about now).
The truth is, aside from Zynga and a few other game companies (Kabam, Digital Chocolate), no one is getting super-rich on Facebook (there’s a definite 80-20 rule on Facebook). Many companies privately complain that Facebook is a monopoly and that they will not be profitable when Facebook starts collecting its 30% fee.
Enter Google and Google+. Google could create official “circles” around games so that game companies can share all they want virally without annoying their non-gamer friends. They could also tie it to Android in the future creating a seemless social mobile game platform.
And here’s the real rub. Based on Google’s other gaming initiatives, Chrome Web Store and Android, Google has a knack of charging nothing for use of its services.
Strategically, Google should be taking a fee for micro-transactions on its platform, given how important mobile transactions is for the company. But, no way will it be 30%. My guess is 10% tops, most likely 5% (similar to credit card fee).
If Google were smart, they’d launch Google Games right around July 1, the day Facebook makes Facebook Credits a requirement and starts to charge game companies 30%.
If Google was really smart, they would offer big social game companies no transactions fees for limited exclusivity periods. For instance, what if Zynga, which Google invested in, decides to launch their next game for 3 months on Google before Facebook. Zynga will lose potential users at first since Google+ does not boast nearly as many as the 700 million users of Facebook. But if Google doesn’t collect a 30% fee and Zynga launches the game only on Facebook, there could be enough Zynga whales (people who spend most money on virtual items) willing to switch to Google to be first to play the game to make it worth Zynga’s while.
Facebook still has huge advantages in social games: a massive audience of gamers, a strong micro-transaction infrastructure, existing partnerships, and 700 million users. Google+ may be pretty, but it’s a long road to 700 million users!
Facebook shall continue to be a monopoly in social games, but they now face two potential credible competitors — Apple and now Google.