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The Industry of Facebook Games

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The editors at Best Accounting Degrees decided to research the topic of:

The Industry of Facebook Games

Social gaming: The activity or practice of playing a video game on a social media platform.

The introduction of games like Farmville and Mob Wars has birthed a new kind of online gaming: social gaming.

In 2004, Mark Zuckerberg announced that Facebook would be open to third-party developers

- Within 8 months, 14,000 apps were running on Facebook

Today, 1 out of every 4 Facebook users plays games

- (250 million people play games through Facebook)
- Up 11% from 2012
- 927,000,000 total hours are spent each month on Facebook games

Facebook made 1 billion in 2011

- 12% of Facebook-s revenue comes from Zynga
- Zynga has developed popular games such as Farmville and Words with Friends
- Money is made through fees and advertisements purchased by Zynga
- 90% of Zynga-s earning are from selling virtual goods
- In 2012, 27 million users purchased in-game items

10% of people who play Facebook games pay real money

- Players will, on average, pay $55

In Q1 2013, Facebook reported making $213 million, mostly from social games

- This is up 15% from Q1 2012

In 2013, Facebook announced that it had, in total, paid out $2 billion to its developers after taking out its own commission of 30%.

Candy Crush Saga

The biggest game on Facebook, Candy Crush got its start on the social network

- Its success took off after going mobile

Candy Crush is the top-grossing app in the Apple App Store

- It rakes in $850,000 per day
- 310,250,000/year - if Candy Crush were a country it would be 218th on the list according to GDP
- 7.7 million users are active per day
- Averages to $.11 per user, but 70% of users have never paid a cent

Candy Crush is a "freemium" app

- its free to play, but users can make in-app purchases to help them beat levels

While Candy Crush is available as an independent smartphone app, its still integrated with social networking

- Users can send requests and gifts to other players through Facebook

What-s so great about Candy Crush?

- Candy Crush levels start out easy and get gradually harder
- Only 5 lives can be stored up at a time
- It takes 30 minutes for another life to generate
- Users play until they-ve advanced several levels and the game becomes more difficult
- Eventually, users are looking for a boost to help them win just one more level

Farmville 2

A sequel to Zynga-s wildly popular game Farmville, Farmville 2 is now the second most popular Facebook game

- Over 40 million monthly active users

As in the original Farmville, Farmville 2 players can plant and harvest crops and raise animals

- Players harvest 850 million crops each day
- Plant 8,000 crops every second
- Available in 16 languages
- Played in 180 countries

Farmville 2 used its success to raise money in a fundraising drive for

- Thanks to this campaign, 17,876 have been supplied with lifetime access to clean water

Despite the success of the Farmville franchise, Zynga has seen shrinking revenue and monthly active users

- In Q1 2013, quarterly revenue dropped 18% from $263 million
- Since October 2012, Zynga has cut 670 positions, reducing its workforce to less than what it was when it went public
- In November 2012, Facebook and Zynga loosened their alliance, bumping Zynga from its top spot in social gaming

It is estimated that by 2015, the social gaming industry will be worth $9 billion, globally

- The video game industry as a whole is projected to be worth $115 billion by 2015