Is Social Gaming an Ecosystem of Hell?

Social games are online games played on social networks like Facebook or MySpace. They are not the same as video games played on XBOX or Playstation 3 console (Axon). Examples of social games include Farmville, Mafia Wars, Bejeweled Blitz, and Tetris. Unlike video games which belong to a “hits-driven business”, social games are designed for more durability (Terdiman). That means even after the game is released for public play, the innovation process continues to iterate and new features are added with time.

An example is Zynga’s Farmville, a social game played on Facebook, which is estimated to have about 83 million monthly active users (Terdiman). Zynga’s marketing strategy is to continue to introduce new games and new features of existing games to engage its existing players (Terdiman). Similarly, PopCap Games is making big money through its popular game Bejeweled Blitz, with the game downloads, the Blitz coins virtual currency, the virtual goods transactions, and the Facebook version (Mack).

A 2010 survey conducted by PopCap Games found that there are approximately one hundred million people playing social games today (Axon). It also claimed that Facebook is the most popular social network site for online gamers (Axon).

Some specific statistics reported include:

• Surprising, the average social game player is a 43-old female.


• 55% of social gamers are female.


• Women, rather than men, tend to play multiple times a day.


• 68% of women prefer to play with people they know whereas only 56% of men indicate such preference.


• 41% of men are likely to play with strangers while only 33% of women would do the same.


• More than 50% of gamers started playing a game based on a friend’s recommendation, or they learned from Facebook’s news feed that their friend is playing that game.

With the growing popularity and prosperity in the social game sphere, industry experts are expressing concerns for the harm to consumers and legitimate businesses caused by the increase in scams by game companies and the inadequate regulatory actions taken by platforms such as Facebook and MySpace to discourage such behaviors. According to Andrew Trader of Zynga, about a third of the company’s total revenue comes from advertisers providing memberships and subscriptions (magazine, CD, and mobile services, etc.) (Arrington2). Now guess where the scam money comes from.

Many experts perceived social gaming companies as unethical because they make money out of scamming the users. The scam started off by getting the users to pay cash for in-game currency used to improve their scores or enhance their gaming experience. Some consumers paid. For others who refuse to pay cash, they are offered them in-game currency when they entertain lead gen-type offers (Arrington). These offers are scams to fool both the consumers and the legitimate advertisers. Some examples of scams include Tattoo Media (mobile scams) and Video Professor (membership and subscription scams). The required payments and commitments are usually written in fine prints or unnoticeable, thus causing users to accept the offer without knowledge of the scam (Arrington).

The consumers are hurt because they get tricked into these lead-gen scams and ended up paying more money than they would have paid in cash to begin with. The advertisers are hurt because some users signed up for free trial just to get the in-game currency, and then they cancelled their memberships. So the legitimate advertisers (like Netflix and Blockbuster) saw lower quality in advertising. They left and were replaced by the less decent ones (like Tattoo and Video Professor). Social network sites like Facebook and MySpace are slow to set rules to stop these scams and they are also not enthusiastic to enforce these rules because cutting off the scams means reduction of significant amount of revenue coming from advertisements by gaming companies (Arrington).

This scenario presents social gaming to be similar to an ecosystem of hell. People get scammed and paid more money. The money gets rolled back into Facebook in advertisements, which generated more users. This creates more businesses and more scams for the gaming company. They advertize more and scam more, and the process repeats in cycles of an unethical mess (Arrington).

Do you think that someday the consumers would become so smart that they would give up their addiction to social games and stop themselves from being scammed?

Blog Comments:
Baribeau, Tami. "FarmVille Podcast Highlights - April 16th, 2010 - Games.com - The Blog." Games.com - The Blog. 17 Apr. 2010. Web. 21 Apr. 2010.

Orland, Kyle. "Farmville Could Be Coming to Smartphones, IPad and SMS - Games.com - The Blog." Games.com - The Blog. 19 Apr. 2010. Web. 21 Apr. 2010.


Sources:
Arrington, Michael. "Scamville: The Social Gaming Ecosystem Of Hell - Washingtonpost.com." Washingtonpost.com - Nation, World, Technology and Washington Area News and Headlines. 31 Nov. 2009. Web. 21 Apr. 2010.

Arrington2, Michael. "Scamville: Zynga Says 1/3 Of Revenue Comes From Lead Gen And Other Offers." TechCrunch. Nov. 2009. Web. 20 Apr. 2010. .

Axon, Samuel. "Who's Playing Social Games? [STATS]." Social Media News and Web Tips – Mashable – The Social Media Guide. 17 Feb. 2010. Web. 20 Apr. 2010.

Mack, Christopher. "For 25th Anniversary, Tetris Gets Social Via Facebook." Inside Social Games - Tracking Innovation at the Convergence of Games and Social Platforms. 12 Apr. 2010. Web. 20 Apr. 2010.

Mack2, Christopher. "Bejeweled Blitz Gets a Boost, a Price Tag, and Facebook Connect." Inside Social Games - Tracking Innovation at the Convergence of Games and Social Platforms. 8 Apr. 2010. Web. 20 Apr. 2010.

Terdiman, Daniel. "Why Zynga Ticks off the Games Industry | Geek Gestalt - CNET News." Technology News - CNET News. 12 Apr. 2010. Web. 20 Apr. 2010.