I’m sure you’ve noticed Google’s been on a bit of a shopping spree of late in the casual gaming space. First Slide, then Social Gold, Adscape Media, and now Social Deck. The rumor floating about is that Google is currently building a social network of their own to be named “Google Me” focused on social gaming and casual play as a direct broadside to Facebook’s success in drawing in gaming revenue and mindshare.
I’m hearing from a trusted source (sorry can’t name the person) that the project is focused on casual play as a differentiation angle, because let’s face it, simply providing a Facebook look-alike isn’t likely to draw a large army of switchers. They’ll have to improve upon the original or create a new niche. That would make sense in light of Google’s pickup of Mark DeLoura, a gaming industry veteran with a resume including the likes of Ubisoft (more on that hire in a bit).
Former Facebook CTO Adam D’Angelo poured fuel into the rumormill fire on a Quora thread with the following (emphasis is his):
- This is not a rumor. This is a real project. There are a large number of people working on it. I am completely confident about this.
- They realized that Buzz wasn’t enough and that they need to build out a full, first-class social network. They are modeling it off of Facebook.
- Unlike previous attempts (before Buzz at least), this is a high-priority project within Google.
- They had assumed that Facebook’s growth would slow as it grew, and that Facebook wouldn’t be able to have too much leverage over them, but then it just didn’t stop, and now they are really scared.
So that’s the buzz (no pun intended) on the possibility of a Google Me project.
There are mixed signals. Google CEO Eric Schmidt was fairly ambivalent on heavy gaming investments when asked about it at the Techonomy summit. Now I mentioned I’d return to the hire of gaming veteran Mark DeLoura. He delivered what was considered a strong debut presentation he gave at GDC Europe showing off the Chrome Web Store for the first time. A few key slides DeLoura focused on showed games such as the popular game Plants vs. Zombies coming to the store in fact. Then he leaves Google after just 4 months on the job, quite suddenly and unexpectedly.
What Does it All Mean?
So we have some mixed signals but also This post is my attempt to connect the dots here and what it means for you if you’re a game developer. I’ll note that I have had nearly no contact with Googlers and this is unabashed speculation on my part. However, I think you’ll see that when we tie together a good deal of publicly available data, a coherent picture comes into focus. Here are three data points to consider:
1. Apple Does More Paid Apps, Google More Free Apps – Take a peek at this chart of the day, courtesy of SAI and Pingdom:
The difference might be due to a number of factors – for example, one is a walled garden while the other is an open source platform. It’s possible in the minds of many consumers open source and “free” are synonyms. In short, for Google to make a strong monetization push, they’re better off leveraging a free to play model than an app purchase model.
2. Mobile games are flying off the shelves
Take a look at 148 Apps.com, and count how many of the top ten paid apps are games. Yep, that’s 8 out of 10, and yes, the two non games are in the 9th and 10th spots. Of the top 20 grossing applications, a full 16 are games – same percentage. The takeaway is hard to ignore: if you’d like to make money in the mobile space, develop a game rather than an application. In-app/game purchase numbers are harder to quantify, but our own data across publishers suggests virtual goods in games are likewise outpacing in-app purchases by a similar margin.
3. The Hottest of the Hot are Free to Play Games
There’s been some speculation about free to play games and the amount of investment going into those games, and some (understandably) wondered whether a new bubble is forming. It’s understandable considering Disney paid $563 million for Playdom, the sector’s third largest developer, last month, and as CNBC says, “That price could escalate to $763 million if the unit hits performance targets over time. The bubble argument falls flat when you consider there are real revenues behind the investments – poised to hit between $2 billion USD to $7 billion USD by 2015. The payback periods of some gaming investments might be measured in 2-3 years by worst case estimates, and even be measured in months the most optimistic estimates. That hardly sounds like a bubble.
It’s about the Mobile Free to Play Games
Put all of the above data points together and think about what it means for Google. I’ll wager Google’s logic goes something like this: ” We’ve become the default repository for the web’s data. The next frontier is mobile game data, which will drive web gaming and stands to become even more lucrative based on early returns. It’s not a bubble, it’s the real deal, and if we don’t move in quickly, we may ceed that position to Apple.”
Hence the Google pickup in three substantial areas of game development and publishing, including the trifecta of game development studios, game publishing infrastructure, and monetization/currency/advertising platforms.
Again, this is all wildass speculation on my part – what do you think? Comment away below!