What a difference a year makes. Last year at Casual Connect in Seattle, everyone was planning to strike it rich making a casual game for Facebook or the iPhone.
Fast forward a year, and now, no one is quite so sure. It’s not all gloom and doom in the casual games space, but there is not a whole lot of excitement either.
Rather, there is a sense of uncertainty that permeates the business, whether you are a developer of download, social, or iPhone games.
What a difference a year makes. Last year at Casual Connect in Seattle, everyone was planning to strike it rich making a casual game for Facebook or the iPhone.
Fast forward a year, and now, no one is quite so sure. It’s not all gloom and doom in the casual games space, but there is not a whole lot of excitement either.
Rather, there is a sense of uncertainty that permeates the business, whether you are a developer of download, social, or iPhone games.
What happened over the past year?
If you are a regular reader of Gamezebo, I may be sounding a bit like a broken record.
On the Facebook side, the powers that be at Facebook decided their platform was getting too spammy (to their credit, they may have been correct) and changed the way that players can share game news, removing game notifications from feeds. They also added Facebook Credits, taking 30% of sales. Right now, it’s voluntarily, but in reality, everyone has to use Credits (its inevitable).
When Facebook made these changes, they said their goal was to allow smaller game companies to compete with the behemoths, like Zynga. In reality, the exact opposite has come to pass. Without virality, it’s impossible for new games to grow from 0 to 100,000 daily active users (DAU’s), the minimum you need to make a penny on Facebook. Compare that to Zynga and FrontierVille with their built-in network of millions of players from the start, and the average new game on Facebook is doomed to experience a failure to launch.
On the iPhone, Apple continues to release new features to help game companies make money – virtual items, advertising (iAds) and soon the Game Center (multiplayer platform). Unfortunately, the one thing missing for most game companies is exposure in the iTunes store that are crowded with 200,000 apps and counting.
Unless you are related to Apple CEO Steve Jobs or have a huge marketing budget, the chance of getting noticed and making money on the iPhone is increasingly getting smaller.
Finally, with games downloads, the key issues remain price compression and competition. Again, I will not bore you with the details here of the issue of pricing on the Downloads business (I already have done so here, ha ha), but I will say that the space is increasingly becoming a divide between the winners and losers.
The winners, like Big Fish Games, which announced 1 billion downloads last week, are doing well. The losers are not. Last week, I heard of 5 more download game companies laying off staff in their US offices, because they can’t afford to develop games for the domestic market at the current price points. A state of “haves” and “have-not’s” is natural in any free market, but too much of a disparity leads to inefficiencies and a lack of competition.
There are bursts of optimism, but a lot of developers confided in me over the past week that they are increasingly down about the casual games market.
Unless you are a big-time player, like Zynga, Big Fish Games, or Playdom, the casual games space is feeling very scary and uncertain these days.
As I was walking the halls of Casual Connect and connecting with game companies, I was reminded of the old Warner Brothers cartoons where Daffy Duck or Wile E. Coyote are about to be hit by an anvil.
There is that moment of clarity in the cartoons where the anvil is falling. Daffy Duck and Wile E. look up to the sky, hearing the anvil get ever closer and awaiting their fate.
That moment when you are waiting for the anvil to drop is where I feel that the state of many casual game companies today. You have not been hit by the anvil, but you can see and hear it coming.
The good news is unlike in the old Warner Brother cartoons, the anvil has not hit the ground yet. You can still pivot left or right to miss it.
As a casual games company, which way do you go to dodge the anvil?
Do you continue to try Facebook even though it’s increasingly becoming mission impossible? Create iPhone games in spite of the hyper-competition? Or do you develop download games where there is too little competition in distribution?
Honestly, I have no idea. But, just so you do not think I’m all gloom and doom, I have resolved to think and write about solutions as well as highlight success stories when I hear about them.
I also wanted to share with you a positive article about casual games on MSNBC where yours truly is quoted on the power of casual games to turn any device or platform into a revolutionary product:
“Companies that have embraced casual games have been the ones that have been able to revolutionize the games business. Those that have held onto the core games have not. Look at Facebook, they embraced casual games. Apple with the iPhone embraced casual games. Look at the three major consoles. Who won? The Wii. Why? They embraced casual games.”
Just because we’re waiting for the anvil to drop, it doesn’t diminish the fact that casual games are the most exciting thing to happen to the games industry since…ever!
