Successful CMOs achieve growth by leveraging technology. Join us for GrowthBeat Summit on June 1-2 in Boston
, where we'll discuss how to merge creativity with technology to drive growth. Space is limited. Request your personal invitation here
For now, Facebook’s gaming managers aren’t worried about the competition from Google+. If they keep doing a good job growing the engagement and monetization of users on their own platform, they expect that game developers, users, and Facebook itself will be happy no matter what the competitive landscape looks like.
The stakes are pretty high right now, as Google and Facebook have finally begun to compete directly against each other this week in the social game market, where billions of dollars are at stake. But if Facebook is worried about Google, its representatives didn’t show it. Rather, they showed off new changes aimed at optimizing the social network for both game developers and their fans. The conversation was wide open and covered a range of topics, as you’ll see below.
Sean Ryan (pictured right), director of games partnerships at Facebook, said in a group interview with journalists today that Google+ doesn’t have nearly as many users as Facebook and that his company is working hard on releasing new innovations for improving game usage and monetization on Facebook. He pointed out that 85 games on Facebook have more than 1 million monthly active users.
Ryan said Google’s effort to invade social networking was a lot like McDonald’s efforts to outdo Starbucks in premium coffee. McDonald’s came it with lower prices, but Starbucks stayed strong by staying focused on its own growth.
“In classic fashion, Google has emulated aspects of our system, which is what they have the right to do, and we just need to be better,” Ryan said.
Facebook’s game enhancements
As we reported on Thursday evening, Facebook has made improvements to the screens that gamers see when they are playing games on Facebook. Ryan and Carl Sjogreen (pictured top left), product manager at Facebook, said that game developers will likely see improved results in terms of games being promoted to the right gamers at the right time.
“Games are important to Facebook,” Ryan said. “We are the only social platform with a game-specific engineering team. Users who play games are more engaged than those who don’t and they are happier with Facebook overall. So we should be catering more to them.”
The features (pictured right) include bookmarks that show what you’ve played most often, a live ticker that shows what games your friends are playing in real-time, and a near-full-screen experience that gives games more on-screen real estate.
“The changes are about optimizing the space here for the apps that you use and providing a stable way to re-engage with them,” Sjogreen said.
Users can customize the space for game and other app bookmarks and control exactly how much game information they see.
Reaction from a key developer
Game developers applauded those changes, but they also say they are looking forward to the competitive maelstrom that will result from Facebook and Google squaring off together. The very fact that Google and Facebook disclosed big changes on the same day was striking to Kevin Chou, chief executive of Kabam, a major social game maker that released its Edgeworld game on both Facebook and Google+ yesterday.
“That kind of innovation and competitiveness didn’t happen before Google entered this space,” Chou said in a separate interview after the Facebook news became public. “The Facebook enhancements are very good. It is fantastic to see gaming news getting in front of a gamer who is likely to be interested in it.”
At the same time, Chou said he was confident that Google+ will grow fast and become a big rival to Facebook. He said it was very important that Google is charging (at least on a temporary basis) a 5 percent commission on game transactions, rather than the 30 percent commission that Facebook charges for its mandatory Facebook Credits virtual currency transactions. He also said he was happy that Google+ has some unique features for games, such as the concept of friend circles, where you could gather your game friends in a circle (or a video-based Hangout) and play a game with them. Kabam counts Google as one of its investors.
Explanation of the game-related updates
Sjogreen said that the company focused on changes to the Canvas page, which is the page that shows when you are inside a game or an app. You can see visual bookmarks in the upper right top part of the page and you can see your game ticker running, flashing items about your friends and what games they are playing. That ticker is generated automatically in real-time, and it tells you if you hit certain achievements on a leaderboard.
“The goal is to make the Canvas chrome more social, automatically,” he said. “We hope this encourages a whole new generation of synchronous games on Facebook, where you play a game at the same time that a friend does.”
If your friends beats you in a game, the ticker will tell that to all of your game friends. In the future, Sjogreen said that feature and the kind of messages that can be shared will be expanded over time.
“We want this ticker to be the most engaging content from all of your games and make this space even richer and more interesting,” he said.
As for the screen, the Canvas page was restricted to a certain size. Now the screen can be almost full screen. Ryan said it is not entirely full screen because of limitations of Flash, where pop-up dialog boxes force the screen size to become smaller and you can’t run chat in full-screen mode.
Facebook’s history in dealing with games
Facebook has had some interesting conundrums to deal with in the past. Early on, games helped contribute enormously to Facebook’s growth. But users grew tired of the spam-like messages from games that overwhelmed their news feeds. So Facebook cracked down on that in the spring of last year, much to the chagrin of game developers who saw their game audiences drop by the tens of millions.
Ryan says the platform has begun growing again, but he declined to provide anything more specific about that other than the 200 million gamers a month figure that Facebook has shared for quite a while. He acknowledged that the growth of game players has slowed, largely because of that crackdown on spam. The growth that is coming now, however, is higher quality in that the players really do want to play games for a longer period of time, he said.
After cracking down on spam with what Sjogreen admitted was a “blunt instrument,” Facebook is now once again trying to figure out how to expand game communications in a way that won’t be perceived as spam. To do that, it has to get the right messages about games to people who are likely to be interested in the specific game being promoted. It is still hard to reach non-gamers with promotions about new games, and it may always be hard to do so. But at least the complaints about there being too much game spam on Facebook are down.
“For the first time, we are now doing a per user assessment about whether an individual is likely to engage with a game,” Sjogreen said. “We are doing a much more nuanced job. We are walking a very fine line between letting games grow and not offending users. Sometimes it is a very fine line. Sometimes we over-correct.”
Ryan said that while some of the older games on Facebook such as FarmVille have seen audience declines, he notes that they have had impressive multi-year runs, in contrast to most console games. And he said that even as older games lose players, newer games from companies such as Wooga are taking off rapidly and gaining millions of users.
“We will see dramatic rises and dramatic falls,” Ryan said.
Ryan had no apology for making life so unpredictable for developers on Facebook’s constantly evolving platform. But he said that Facebook’s rapid innovation has been good, with changes coming every couple of weeks rather than twice a year with the connected consoles such as Microsoft’s Xbox Live gaming service. But Ryan acknowledged that it is good for Facebook to give developers more visibility into any changes in the platform that happen.
Google+ is set up to separate gamers and non-gamers in a well-defined way, so the problem of spam on one side or not enough game promotion on the other doesn’t arise. So Google is trying to take advantage of Facebook’s example, by setting up an environment that is more clear on gaming.
More features that will help generate more engagement in games are coming, Ryan said. The recreation of the Canvas page is the foundation for those changes.
The latest approach to dealing with game developers
The new Facebook features have been in testing for two months now. The whole effort shows that Facebook realizes it must cater to developers or lose them to Google. Ryan said Facebook has met with 230 developers in small meetings in the past four months. Most of those developers want to know how to get better distribution and monetization.
Ryan said that there were significant misperceptions about whether Facebook favored its biggest developer, Zynga, too much. We noted in a recent story about how developers were upset about Facebook’s tight relationships with the leading social game maker, Zynga.
Ryan flatly denied that Facebook favors any one developer more than others. He said the company has an open platform and its goal is to make all game developers successful. He said that the company has a track record of enabling developers to grow quickly and become financial powerhouses in a very short period of time. While Zynga and Facebook share a common investor, Ryan noted that Facebook itself has not invested in any game developers; he noted that Google has invested in Zynga, Kabam, and purchased Slide. (Yes, that’s a jab at how Google could be biased in favor of certain game developers itself).
“We grow the overall ecosystem and the goal is to get gamers who are more engaged,” he said. “We want an ecosystem where developers win, users win and Facebook wins.”
Indeed, the goal isn’t to get as many gamers as possible, but to get gamers more engaged. Recent changes have been about cleaning up “misalignments” in incentives among developers, Sjogreen said.
Ryan shook off the Google strategy of offering a lower commission on transactions.
“Developers will go where it makes economic sense for them to go,” Ryan said. “Google is at 5 percent because they don’t have any users.”
Google, in fact, has around 29 million users for Google+, according to market analyst comScore. Facebook can laugh at that number, since it has 750 million users. But not for long.
If developers focus on creating innovative new titles, Ryan believes they can succeed. He said there are many under-served genres on Facebook such as hidden object games. There are just a couple of hidden-object games on Facebook, where there are 150 or so on Big Fish Games’ casual web site. There are also very few first-person shooters on Facebook, he said.
Facebook is rumored to be working on a better mobile platform, but Sjogreen declined to comment on that, other than to say that mobile is an important part of the user experience.
VentureBeat’s VB Insight team is studying marketing analytics...
Chime in here, and we’ll share the results