LeWeb: The Rise of the Social Game

Sebastien de Halleux, Co-Founder, Playfish & VP, Business Development & Strategic Partnerships, EA Interactive is up now, kicking of the social gaming strand.

Veronica Belmont kicked off by asking why so many existing social games were derivative of concept and brand.

de Halleux didn’t answer directly, suggesting that he hoped that more new concepts would be coming forwards soon. On Facebook, they tried to launch new categories of games, to attract people who weren’t existing gamers. In the first quarter of next year he suspects we’ll see a raft of announcements of new gaming concepts. Disney will be announcing some things…

How many on Facebook are engaged in social games? Roughly half of them: 200 to 250m users…

Many traditional categories aren’t represented on Facebook yet – action games, third person shooters, and the like. He thinks that gives great room to innovate (although I’m not sure that just porting existing categories to a new platform really counts as innovation…)

Playfish sells 90m items a day – so virtual goods sales are high. Why do people buy these items? It has to do with social emotional reactions. 8€ for a random pack of five players in Fifa is very meaningful to football fans. You need to sell things people connect with. (He said that players in World of Warcraft buy functional goods – they’s flat out wrong. Blizzard only sells “emotional” goods – basically non-combat pets).

The overall revenue model is very different from traditional gaming. There, you buy a box and that’s your cost. In social gaming, the majority of games are free, and you make a series of micropayments to add additional things within the game – that allows the players to set the value of the game to them, rather than have it defined in advance. The pressure from players has been to allow them to spend more – buy $100 gift cards for each other, for example…

Real world linkage and “game enhancement through brands” (product placement) – mapping virtual flowers and Seven Up to real world purchases has been very successful – but he’s wary of going too far in that direction. They turn away more advertisers than then accept. Their central customer (and hence revenue stream) is the paying customer, and they don’t want to be serving two masters badly.