Has the Bubble Burst?

No one can deny the fact that social gaming really seems to have taken off. Nowadays, most people think nothing of playing free online games on their favorite game hosting or social networking sites, or mobile devices.

The Internet has definitely changed the world of gaming. The fun little games you can play for free on your smartphones and Facebook are a lot of fun. They’re also a great way to connect (and compete) with friends from the past and to make new friends and acquaintances along the way as you expand your network for the sake of the game.

But is this an industry that’s about to take off or one that has already peaked?

There are two major problems with social gaming as an industry.

1) These aren’t the games that diehard gamers stand in line for two days and call in sick from work or school in order to play. They haven’t tapped into the rock solid core of gamers and that’s something that needs to happen so that this can really take off.

2) They haven’t found a way to really monetize these games successfully.

Granted, there are more people who play these games – in fits and starts. But they aren’t always a loyal following. Most will play one for a while and then get distracted by the next new game their friends are flittering around to.

Hardcore gamers consider the games unsophisticated and, dare-I-say-it, fluffy. They’ll play for a while to humor their dear old aunt Edna a hundred miles away but they aren’t really interested in upgrading chicken coops for better egg gathering potential in a video game. They want big plots, massive storylines, men with big guns, and women who don’t hit like girls.

When you consider the monetization issues, or lack thereof, it’s going to be difficult for this industry to sustain itself. Most people play these games with their friends and family members because they are a free distraction during television commercials and on lunch breaks at work. They aren’t dedicated enough to them to buy more than a few of the bonus packs that are available for the games in question.

Advertising revenue from these games is also insubstantial. The question remains, can the popularity of these games translate into positive revenue? At the end of the day, it always comes down to profit. It takes money to build, staff and maintain these social games. While there may be more people playing the free games that are found online, they aren’t paying much, if anything, for the pleasure.

So, has the bubble burst for social gaming or is it just getting ready to take off bigger and better than ever before? Will social gaming do to console gaming in the years ahead what video did to radio back in the 1980’s?

Social gaming will very likely eclipse console gamers by the number of people playing. At least that will be the case as long as they make the games free, or very cheap, to play. If they do not find a way to make nickels and dimes from their players the party will be over sooner rather than later.

Console gaming has fewer players by far. However, their players are devoted to the games they love and willing to shell out $60 a pop to play them. Until that kind of loyalty is prevalent among social gamers, console gaming isn’t going anywhere.

It is likely that the companies who create social games will eventually find a monetization system that works for them and the two gaming entities (console-type games and social games) will be able to coexist in relative harmony. The Internet is huge and there is room for gamers of all persuasions to play.