The games business has always been hit driven, and the move online hasn’t changed that. World of Warcraft alone commands 62% market share of all MMOGs. In the casual games business, the top 20 games constitute 75% of total industry revenue. As more games have launched onto Facebook, we still see a hit driven business. There is an order of magnitude change in the number of daily actives in just the top 25 games on Facebook:
Game, Daily Actives (‘000s)
Friends for Sale, 672
Texas Holdem Poker, 581
Compare people, 393
Lil Green Patch, 338
Speed Racing, 260
Who Has The Biggest Brain, 135
My Heroes Ability, 96
Mesmo TV, 93
Have You Ever???, 86
Parking Wars, 68
Scratch and Win, 67
Fight Club, 64
Hotties For Sale, 59
The graph below makes this point even more dramatically, showing a strong power law distribution for the 2190 games on Facebook:
Game 100 has 6,000 daily actives, game 500 has 150 daily actives, game 1000 has 23, game 1500 has 6 and games 2000 and up have no daily actives at all.
In an environment with as long a tail as this, companies need to take a portfolio approach to their games. Zynga has taken the approach to cross promoting their new games on launch, to good effect:
Although Zynga’s games also show a power law distribution as well, all but one of their games has made it to the top 100 in daily actives.
Social Games Network has built its portfolio through a combination of cross promotion and acquisition.
Their power curve is not as pronounced because they have bought some successful games to fill out their portfolio.
The difference between SGN and Zynga is really one hit game, Texas Holdem Poker.
Social games companies that learn how to repeatably create and launch hit games will become very valuable.