Social Gaming Execs Discuss Growth, Monetization, And The Future Of Facebook Games

Today at the Inside Social Apps conference in San Francisco, a panel of top social gaming executives met to discuss the future of gaming on Facebook. The conversation touched on quite a few issues, including the evolution of social gaming mechanics, monetization, and whether or not the industry would be able to continue its incredible growth over the next few years. One bold prediction: Playdom CEO John Pleasants says that the reach of social games will double in the next 18 months.

The Panelists:
John Pleasants, CEO, Playdom
Peter Relan, Executive Chairman, CrowdStar
Vish Makhijani, COO, Zynga
Keith Rabois, VP Strategy and Business Development, Slide
Kavin Stewart, CEO, Lolapps
Moderated by Eric Eldon

Pleasants’ prediction came after an audience member asked if the social gaming companies would be able to sustain the growth they saw through much of last year. Zynga COO Vish Makhijani acknowledged that Zynga had seen some slowdown last quarter, but said that signs pointed to that trend changing. And the general consensus seemed to be that there was still lots of room for growth on Facebook, particularly internationally. The group also noted that there were opportunities abroad on social networks other than Facebook.

Another question touched on multiplayer in social games — or, rather, the lack thereof. Look at most popular social games these days, and you’ll notice that most of the interaction between games happens asynchronously, which isn’t really ‘multiplayer’ in the traditional sense. Lolapps CEO Kavin Stewart says this is because there already is a market for synchronous gaming, with games like World of Warcraft and console games. Slide VP Keith Rabois echoed this sentiment, explaining that synchronous multiplayer games are generally time consuming, and that Slide’s research showed that most people use Facebook in quick, 5-10 minute sessions between classes or when their boss isn’t looking. Not everyone agreed that synchronous gaming was out of the picture though — Playdom’s John Pleasants said that we’d probably see synchronous gameplay as an extension of some asynchronous games (I think he’s right).

One audience member asked about the recent report that Zynga was worth $5 billion. Makhijani declined to comment on the report, but CrowdStar’s Peter Relan concluded that it wasn’t off base. His logic? Relan says that casual games can scale to 10x the audience of more ‘hardcore’ games like World of Warcraft, and perhaps even more than that. The revenue models are different for these games (WoW uses recurring subscriptions while social games favor virtual currencies and virtual goods) but he says this huge audience make the valuation reasonable.

Perhaps the most interesting aspect of the panel was what wasn’t said, at least not directly. During a question on monetization — namely, Facebook’s Credits — there was a lot of talk about how a unified credits system can help developers because it allows for one-click purchases across all games. But there was also a sense that the developers didn’t want Facebook’s currency to become the only option for developers. Slide’s Keith Rabois noted that Facebook Credits are good for paying users, but there are other channels (like Offers) that address a broader audience. In other words, he doesn’t want to be chained to Facebook Credits, at least not yet.

Ultimately, though, it doesn’t always matter what the developers want. When asked if Facebook listened to these game developers when it came to policy changes, most of the execs noted that while Facebook might solicit their input, when push comes to shove it does what it wants.