Casual Games + Social Networking = "Social Games" (aka The New Hotness)

ok, i'm calling it right now:

Social Games is teh New Hotness.

seems like there's several new social game startups debuting lately, such as Zynga Game Networks founded by Mark Pincus (@ left with dog of same name). 

i'm probably late to the party, but i've been hearing more & more about companies in this space, and after the NY Times article on Zynga i'm guessing it's now officially the hot new VC investment category for 2008.

(note for bandwagon entrepreneurs: "hot" does not necessarily mean "smart" or "likely to make money", but it probably does mean we'll see more startups jumping in & VCs opening their wallets ;)

but wait a sec, what the hell is a "social" game?  aren't all games social by definition?  what's new here?

Social Games = Casual Games (user engagement) + Social Networking (viral distribution)

briefly: "Social Games" is the handle for a new group of startups that combine the user engagement / retention attributes of "Casual Games" (easy-to-learn games with a broad audience target) with the viral distribution potential of social networking platforms like Facebook, MySpace, and others.

why is this such an interesting area?  3 reasons i think:

1. social networks are a great environment for using & distributing games
2. "casual games" are accessible to a very broad audience of users
3. games drive deep[er] user engagement & retention (which might help monetization)

(btw: i'm still exploring this area & hardly an expert, so please feel free to comment / pile on / make corrections in the comments)

other companies in the space i'm aware of: Webs.com, Buddy Media (also created the FB app AceBucks), Hive7, and perhaps SocialMedia, which for the moment is positioned as a third-party ad network for Facebook. Kongregate is probably also in the mix, altho no social networking angle there yet that i'm aware of (did i miss it?)... still, would be pretty easy addition / integration for them (in fact, now that i think about it Kongregate might be an interesting acquisition target for Facebook).

others i missed?

links to folks who seem knowledgeable on casual games / social games:

• Raph Koster
• Amy Jo Kim
• Jeremy Liew
• Andrew Chen
• Naval Ravikant
• Nick O'Neill
• Saar Gur
• Susan Wu
• Jeff Clavier

again, i'm probably missing a few notables here... if any other companies / people i've overlooked please feel free to pile on in the comments.

UPDATE: "Hot" can also mean "getting sued" it seems... Hasbro (the owner of Scrabble) is suing to get the Scrabulous app taken off Facebook.

Comments

[Richard Krueger]

Rajat - check out my article at www.widgetaday.com, as I included BunchBall in my social gaming overview. You guys are doing some really interesting things in the space.

[Rajat Paharia]

We have several multi-player games that you can play with other people on Facebook and Bebo: http://apps.facebook.com/games and http://apps.bebo.com/bbgames

[Richard Krueger]

Certainly seems to be the hot sector of the moment. I wrote a post titled, The New Social Gaming Paradigm, a week ago, in which I highlight three of the leading social gaming players. Since then, I've been contacted by numerous start-ups in the space and I plan on doing a second post on the topic. You can find my original post at http://widgetaday.wordpress.com/2008/01/18/the-new-social-gaming-paradigm/

[Shervin Pishevar]

Dave,

Great post. I am CEO of SGN (social gaming network). We are spinning SGN off from Webs.com. We launched Warbook back in August and have games like StreetRace and Fight Club (1.4 million installs) and more. We are now over half a billion pageviews a month. We are focusing on original game ideas built for social networks. Would love to talk offline sometime.

Cheers,

Shervin
CEO, SGN

[Hooman Radfar]

My adds to the list are Shervin Pishevar (CEO of SGN) and Blake Commagere (Creator of Vampires).

[Burak Arikan]

The limit of the gaming category is hard to define. You may also want to check out Meta-Markets, the online stock market for trading socially networked creative products.

http://meta-markets.com/

[Eric Marcoullier]

Dave, add Brenda Brathwaite to your list:

http://bbrathwaite.wordpress.com/
http://en.wikipedia.org/wiki/Brenda_Brathwaite

[Chad Boyda]

You're absolutely right Dave! As a member of this new "hotness" it's a very exciting time. We, Launch 10 Labs, published the first of our "social games" a few months ago and have several more in development. It's exciting to see the landscape changing so rapidly, and the competition heating up just makes us work even harder.

The focus is definitely on casual gaming and providing a socially valuable experience to users. I see a lot of companies trying to take their existing games, for example flash games, and drop them into Facebook and hope they work. They don't though because they lack the social aspects that draw a lot of people into gaming in the first place. A single player game in Facebook is no more fun than a single player game on the web or your desktop. Involve their friends and suddenly it's a whole new game.

[James McDisi]

Let's not forget Conduit Labs, I first read about the idea of social games about a year ago on his blog Brinking (http://nabeel.typepad.com).

I don't know if they are actually doing social gaming, but it sure looks like it.

[Michael Lazerow]

Money is flowing into social gaming companies because many of our businesses are actually generating real, sustainable revenue and are well on our way to creating monster businesses. Investors are not betting on potential revenue. They're investing in current, rapidly growing revenue streams. The social networks make it more cost effective than the public web to (a) create great products; (b) distribute them widely; and (c) monetize them. While we can debate whether or not CPI (cost per install) revenue is sustainable, there is no doubt that the application is the new media property and advertising unit rolled up in one.

[dave mcclure]

@Max: i agree there's more here than just "Casual Games meets FB", but as you suggest even just that part appears to be ushering in a significant change in online user behavior.

and i also agree Jeremy Liew's been doing some great posts on this topic -- we tapped Jeremy to speak about Social Games at the upcoming Web 2.0 Expo conference this April in San Francisco, see:

Games 2.0: Why the future of games looks more like Zombies and Scrabulous and less like Halo 3

(plug: i'm co-chairing the event again, along with Brady Forrest & Jen Pahlka)

@Fred: i'm not surprised both you folks & Jeff were in early on this trend. that said, i think you *will* see quite an avalanche of interest / followers... hopefully that doesn't dilute the potential in the sector.

[Jeff Clavier]

Fred, congrats on the investment but I hate to break it to you: gaming is definitely the hot new thing with a lot of first time gaming entrepreneurs jumping in, alongside first time investors.

[fred wilson]

Dave - we actually closed this investment months ago but didn't want to announce it specifically because of this "new hotness" phenomenon. i sure hope we don't see an avalanche of me too investments in the sector, but if it happens, so be it.

fred

[MaxS]

Dave, I think the reality is even more interesting then just putting casual games on social graph. FB platform to a certain degree triggered re-birth of innovative gaming industry over past 6 mon. Jeremy recent posts on “Games 2.0” are right on target. Its not just same old games delivered via new platform. We are looking at new landscape with new [game design] rules and definitely lots and lots of new opportunities coming to life.

We definitely are going to see significant increase in number of people who are playing these games. Person who would not normally play is much more likely to try under friends-driven incentive or discovery. Lots of games which can’t surive (no critical mass for community) in vacuum of general web are much, much more easy to jumpstart and thrive on social network. We definitely are going to see more brand new type of games being created. Finally, monetizing the audiences with _that_ level of addiction and emotional attachment we currently seeing on facebook (in our games and others) is the least risky part of that model. In short its great time for [web] gaming industry in general, and for companies in the space.