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Think Big. Move Fast.

Yesterday I moderated a panel on social games at Graphing Social Patterns. The panelists were Mark Pincus (CEO of Zynga), Shervin Pishevar (CEO of Social Game Network), Michael Lazerow (CEO of Buddy Media) and John Hwang (CEO ofTrip Monger, whose primary app is Speed Racing). It was a wide ranging discussion.

First we discussed what differentiates a social game from other sorts of games, and in particular multiplayer games. The general consensus is that a game is social if the social context of the relationship between a player creates or enhances the gameplay. For example, if emotions like guilt, pride, reciprocity, gratitude or vengeance get evoked in the gameplay because of the combination of gameplay and player relationship, a game is social. These emotions of course greatly increase the level of engagement in a game. Scrabulous’ turn based game play (which can induce guilt for keeping a friend waiting for your move) and Warbook’s revenge attacks were both presented as examples.

We then discussed some of the specific game mechanics that have worked well for social games to keep high levels of engagement. These included asynchronous play and many of Amy Jo Kim’s game mechanics. Mark talked about the importance of dedicating resources to constantly tweaking and improving a game to keep engagement levels up since the environment changed so frequently. John Hwang talked about the need to focus on the “hits” in a hit driven business, rather than trying to make every game a hit.

The conversation turned to monetization. We noted that despite the early stage of the four companies, all of them were profitable. John Hwang said that an individual developer with a good game can make a great living off the ad networks. Mike Lazerow thought that “advergames” or sponsored custom games were going to become the standard ad unit for games. His company (Buddy Media) is trying to avoid the hit driven nature of the games business by building game skeletons that he can reskin for new sponsors. They have had great success, garnering a base of 24 blue chip brand advertisers so far, with each campaign averaging over $100k. Shervin said that SGN had been successful with both direct sales and with rich media ad networks, especially VideoEgg. Mark was most excited about the digital goods opportunities for Zynga. He noted that they had just launched their first game with digital goods baked into the game design, Ghost Racer, and with a base of just 30k daily active users, they were already seeing a run rate of over $20k/month in digital goods revenue. Shervin noted that while Warbook doesn’t have an explicit virtual goods model, Warbook gold had been showing up on Ebay and one player had made over $1,000 selling Warbook gold.

We next talked about how social games can grow. Viral growth has obviously been the key driver of growth up to this point for all the panelists. Shervin noted that they had seen a strong positive correlation between App Rating and rate of viral growth – high quality games spread faster. Mark talked about the importance of supporting a game with advertising, especially at launch. He said that many of the Zynga games had bought their early distribution so that they had a bigger base from which they could grow virally. However, as Facebook has clamped down on some of the viral channels, the panelists talked about other growth channels. SGN, Zynga and Buddy Media have all made acquisitions to help with their growth. SGN and Zynga both talked about the importance of having cross promotional and viral channels beyond the control of Facebook. They are interested in creating networks whereby apps can cross promote each other directly in canvas pages, and hence are not subject to changes that Facebook may make in the future. Both companies mentioned their respective game promotion networks as possible solutions to this problem.

If I missed elements of the discussion, readers please feel free to add them in comments. I wasn’t able to take notes since I was moderating, so this is relying on my imperfect memory! The video of the panel is also available here (scroll down a ways). UPDATE: Unfortunately the video seems to have been taken down.