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Social Gaming Summit 2011: Mobile the future as social studios brand the web too expensive for startups

Is web-based social gaming on the wane?

Social Gaming Summit 2011: Mobile the future as social studios brand the web too expensive for startups
There was undoubtedly a feeling of the blues at the talks and presentations at this year's Facebook-focused Social Gaming Summit, and not just due to the event's setting – deep in the bowels of Chelsea's Stamford Bridge stadium, London.

The common theme that emanated from the web-based social companies in attendance was the cost of breaking into the market.

In talks dominated by monthly active users (MAUs), user retention – or, indeed, the lack of - and targeted advertising, the overwhelming message was that costs are quickly spiralling out of control.

Blue Monday

In a sector dominated by social behemoths such as Zynga, industry dominated by huge firms like Zynga, Davor Hebel – a partner at venture capital specialist Fidelity Growth Partners Europe - went as far to suggest that those hoping to start 'from boot-straps' (no investment) had a "very low" chance of success without at least "5-10 million dollars" to hand for the targeted advertising campaigns.

Naturally, estimates from those not in the investment business were significantly lower, with director of business development at 6waves Dan Laughlin stating "to get a million MAU, you're talking hundreds of thousands of dollars".

But his overall assessment of the platform was far from rosy: "As a platform, the overall numbers are plateauing...the cost of user acquisition has risen," he stated.

"You're going to still get virality and cross-promotion, but at the end of the day you're going to have to do a lot of paid advertising."

Upwardly mobile

In contrast, talks at the Social Gaming Summit treated mobile, perhaps confusingly, as the 'new' frontier for the social gaming scene – a place where Facebook devs should look to move to if they want to survive.

Even Facebook itself, while stopping short of suggesting people shouldn’t develop for their web platform, had a simple mantra for developers during their keynote speech - "mobile, mobile, mobile".

"Bet on mobile, HTML5. This is really the future of gaming for us."

Yet, there was still a fair degree of misunderstanding about the market during talks from web-based developers, with Arseny Lebedev - MD at Signuslabs - going as far to say that “"super social games don’t work on mobile", an odd statement given the success of titles such as Smurf's Village, itself not available through the browser.

Money is power

A more concerning factor was that the quality of user experience was firmly in the backseat when it came to the majority of the presentations, especially during the first day of the show.

Talks of 'buying' users – a hangon from the world of Facebook advertising – was rife. Indeed, it was a stance typified by Hussein Chahine, founder and CEO of Yazino, whose advise for smaller devs breaking into mobile hinged solely around "conversion rates" when compared to the web.

One of the dissenting voices to this opinion was surprisingly from an investor - David Gardner, founding partner of London Venture Partners.

"I've seen a lot of people move to social," he stated, "people doing it for the money, not the passion.

"If money is the primary objective, usually they're a bit lost in what they're doing."

Convergence

But while the focus of the summit still very much felt rooted in the world of Facebook gaming, it was interesting to note that the companies with stalls in the main reception area were almost exclusively focused on mobile middleware solutions.

It wouldn't be surprising if next year's event saw mobile transformed from being merely talked about on the sidelines, to the word being chanted loudly from the terraces.

Will's obsession with gaming started off with sketching Laser Squad levels on pads of paper, but recently grew into violently shouting "Tango Down!" at random strangers on the street. He now directs that positive energy into his writing (due in no small part to a binding court order).