Social Gaming | Virtual Currencies | Social Media World Forum

And the award for “Best in Show” goes to the social gaming panel. Day 2.

I had this session double starred in my program from the get-go. Social gaming is an exploding market and contrary to popular perception, it’s not all about kids and teenage boys. This sector has serious ‘momfactor’. In a nutshell, audience, scale and enourmous commercial opportunities for brand.

Our panel of experts we’re moderated by Michael Caselli founder of Lyceum publishing and a prominent figure in the online gaming sphere. I’d seen Michael in action at the recent London Affiliate Conference and it was clear he knew his panel and his subject matter. We weren’t disappointed at Social Media World Forum, as the panel were directed in a smooth and highly relevent way, meaning we got some great stats and insights.

Panellists: Oliver Lo, Senior Marketing Manager of XPD Media/Vojo World; David Wang, CMO of SEGA Europe and Adam Caplan, VP (Virtual Currencies) Adknowledge.

As you can see, the panel is a great mix of social game providers (XPD), global gaming brand (SEGA) and monetization (Adknowledge).

MC – starts us off with reference to current monetization strategies for online games/social gaming and asks if Adam can talk us through the steps to lead generation.

Adam – with a highly engaged user base one client went straight to a virtual currency model, and saw 100x revenue increase overnight. This staggering figure is reiterated, so that there is no misunderstanding. Yes folks 100x revenue increase overnight. Adam sees a huge shift coming for many online areas that may even be considered mainstream, shifting to this model, or rather factoring a virtual currency element as a core part of a blended revenue model. Why? From their experience with the highly engaged audiences that you find in this sector, if just 5% of that audience sign-up for such content, this is a much bigger revenue win than 100% of the audience in more traditional revenue models.

MC – Is there going to be a downward pressure in the lead-gen marketplace in that case? Adam thinks no. If we look at the shift to social media, people aren’t reading newspapers anymore, they need to be rewarded for engaging with brands. Brands are wising up to this and they’re starting to see greater brand participation which is great for the sector as it’s driving buoyant CPMs.

MC – what is the main platform for eyeballs and revenue from your perspective Adam?

facebook, by far and away. In fact last year, FB paid out $100M to publishers last year, and this is the largest revenue sector for them. Clear proof of the micro-transaction model in social media.

MC – David, where do you see this market from a big brand perspective?

David stresses that these are exciting times and we’re still really early stages. We’re just starting to see organisational change, and that ROI and growth is being noticed, which is what is required to get on the agenda for larger organisations at board level.

MC – Oliver, I know that XPD moved to Beijing some time ago, and this seems to be a pretty exciting market for social gaming. How far behind is West vs East.

Oliver tells us that the West is playing catch-up in a big way. (My paraphrase). Virtual gaming is a ten-year established sector and emerged from Korea, China and Japan. Definitely not just for kids or hardcore gamers, social gaming is already mainstream, precisely because it is social. Their biggest market by far is China, and the total US market for social gaming is just one fifth that of China. A significant percentage of all time on Facebook is now spent purely on social games and the driving sector is female.

MC – Let’s talk more about monetizing social gaming and in particular FB credits. How tangible is this? A passing fad or a here to stay currency as real as the $?

Oliver – this is clearly no passing fad. They’re (FB) not closing the channels or competing here (you can buy FB credits through PayPal) but partnering. FB credits bring the brand trust with it (and of course convenience). This is a great tool for developers. More trust = more plays. (Hear hear!)

To sum up, Michael asks each panellist to give us their one-stop future tip for this sector.

Adam – social gaming will be the largest online market in 5 years time.

David – social gaming will have full mass market penetration in three years time.

Oliver – watch out for convergence between social/Facebook games and iPhone apps, which has some really exciting commercial implications.

My Summary:

Zynga (online poker, casino, farmville etc) Crowdster (#2 social gaming company globally and creators of Happy Aquarium, Happy Pets, Happy Island), XPD/Vojo (Mafia Wars, Gang Wars, Vendetta) all of these companies have social games with player volumes in the 100s of millions. These audiences are highly engaged, and they hold the household purse strings. A hugely exciting sector with numerous capabilities and monetization opportunities for brand.

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