Alex St. John is at it again.
For over a decade now I’ve watched him grow as a businessman and continue to effectively elicit responses with smacks across the collective face of anyone who cares about the game biz. Much needed, of course, since Games enjoys some of the most brilliant people alive and some of the most tunnel-visioned, not-in-my-house curmudgeons. Sometimes those traits can be found in the same person.
Summed up, St. John believes that social gaming is a mess.
While I completely agree that there’s a lot of unfounded hype in the whole social game market, I disagree on one fundamental point he makes. He seems to be arguing that the old school market works better and is where things will end up again when the almighty dollar dictates the ending.
Half true. Money will write the ending to today’s fading social games market. And that ending will be the emergence of social gaming as the biggest money-maker in games.
Well, the fact is the games market has fundamentally changed. Folks who never played games before now implicitly expect to play with their friends in a passive, non/pseudo-competitive way. They want those social hooks that only linked communities can provide. Who’s best positioned to offer that kind of game?
So once FB gets into the games business, they will be the game to beat. And guess who’s best positioned to be #2? Yahoo, AOL, Google and MS. Why? Because they have the eyeballs and the tools to link people together. If the big players create social games for their services and treat them with the same priority as they do email, chat and search then they’ll make a mint.
The old-school downloads business will continue to be a tertiary way to monetize, if that. Anyone who depends on it will fade away.
Simply put, St. John is dead-on at how ugly things look in the social games market right now. But the result of this mess will be a market ruled by premium services, microtransactions and ads. The biz that embraces these revenue streams and rotates the largest pool of people around their games experiences will win.
Who will step up first? Google Me likely. But I anticipate they will make fundamental mistakes that only an MSN, AOL or Yahoo would anticipate. Namely, how to offer a service that isn’t siloed, but is rather a persistent presence across the service.
Yes, I’m saying the portals have a chance to own a much larger chunk of the games market because they run traditional homepages. Crazy talk, I know. And, hey, they may not step up, leaving the dollars on the table for someone else. But my guess is that Google’s move into social games will open some eyes and set off a new, segmented social games market where at least one social game will exist on every site with enough visitors to convert to players.