Video game industry is changing fast. More than changing, it is expanding to new unexploited segments of the market. Since the 70’s, video games have being increasing in complexity, both in graphics and playability. The first video games, like spaces invaders were no more than a handful of dots gathered in a way that reminded you a spacecraft. Right now, video games such as GTA display near to reality graphics in huge virtual worlds. Also the learning curve to play those games became bigger, making almost impossible to fully control the game.
All this features are highly appreciated by hardcore customers, but they leave out of the industry basically everyone else. This left unexploited a huge segment of the population that also happened to be the segment with the highest purchasing power. With this in mind, Marc Pincus creates Zynga in 2007, one of the first social videogame companies and without any doubt, the most successful. The proposition? Easy to play games with simple graphics. The business model? Freemium: free to play games with premium content only accessible by payment.
The first games and its biggest success were Zynga’s poker and the extremely popular FarmVille, both oriented to a middle age segment, with a larger purchase power and with a limited interest in videogames. The behavior pattern of this casual users is completely different from the patters of the regular gamers. They are not willing to expend money upfront, they play a limited amount of time and they are hard to retain.
The technical characteristics of these new games allowed them to use a new platform: Facebook. This new platform also proved extremely suitable for viralization. Invitations from friends to friends and posts in their walls were a cheap and effective way to reach a mass public. In January 2013 Zynga games had a combined MAU (monthly active users) of 265 million.
Question remains in the industry if this is just a fad or it’s a sustainable business model that is here to stay. After Zynga didn’t match its expectations several analyst were highly critical with social games’ companies, creating a huge crisis in the sector.
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Consumer Value Creation 