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Smeet, the Berlin-based 3D social networking site and social gaming publisher, is reportedly laying off half of its technical team today, and this could be due to key changes in Facebook policy that make it more difficult and expensive for games publishers to exist on its platform.

Hailed as “Europe’s largest 3D interactive social platform,” Smeet currently has over 110 employees, although it may cut as many as half this number due to the decision to close its second product line of developing and publishing social games on Facebook.


Turning a profit becoming harder on Facebook

Smeet provides various online gaming and entertainment options so players can play, watch live webstreams, and live text or chat as an in-browser experience. Similar to Second Life at its peak, Smeet had the power to attract major advertisers and business partners, such as Rocawear, CBS’s The Big Bang Theory, and the CW’s Gossip Girl.

A large part of Smeet’s recent development, however, was in Facebook gaming. Its first social game on Facebook, Lost Legacies, chalked up around 180,000 daily active users and more than 1.2 million monthly users.

Sebastian Funke

Sebastian Funke, the CEO and founder of Smeet, told VentureVillage in a statement today that “the monetization of the game and its users stayed behind the expectations … especially after recent Facebook policy changes” – essentially making it more costly and difficult for publishers to gain visibility within the platform with existing titles, a problem that big-name publishers such as Zynga have also faced.

He added: “The social gaming space has become more and more difficult, marketing activities become increasingly expensive, and retention and activity of the users continuously decreases on the Facebook platform.”

So what next for Smeet?

But it’s not game over for Smeet just yet. Funke maintains that despite this blow, “the Smeet management has decided to concentrate on core activities, including its 3D platform Smeet and its partnerships with large web portals and TV networks.”

It hasn’t disclosed exactly how many employees have lost their jobs, and Funke maintains that “we are not laying off people immediately. They are still in the company, and we’ll try to outplace them over the next weeks,” although one staff member at the company said that there has been an “emergency staff meeting” today, going on to say that it was a day when “half of your company [is gone] in a single afternoon.”

Smeet began life in 2006, and in an interview with VentureVillage in March of this year, Funke claimed that it had 15 million users worldwide, represented in over 15 countries and “growing at a rate of 40,000 new registrations a day.” Its Facebook community is nearly 800,000 and it has received over €8M in funding (approximately $12,822,400) to date.

For related articles, check out:

Stepping into Smeet
Sebastian Funke interview

This article ran today on VentureVillage, VentureBeat’s Europe-based syndication partner.

This story originally appeared on VentureVillage. Copyright 2012

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