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Rising broadband penetration and the popularity of social networking sites is driving the social gaming market
Global Industry Analysts, Inc. has released a new study on social gaming markets, a global phenomenon projected to reach about US$18 billion by 2018, primarily driven by rising broadband penetration, the introduction of consoles with online capabilities and advanced wireless phones capable of supporting game downloads, and the ever rising number of subscribers to social networking sites.
Favourable demographic trends and robust demand from developing countries, Asia-Pacific in particular, also augur well for the market. The Asian Pacific market represents one of the most prominent regional markets with annual revenue from the region at a CAGR of around 36.9 percent over the analysis period, says GIA.
One of the many influences of modern technology on social interaction is the growing use of online gaming as a medium for social interactions. The importance of social interaction in games can be put into perspective by the fact that “social interaction” is becoming an increasingly important theme in multiplayer gaming. And mirroring the trend is the growing replacement of individual game consoles, which once ruled the video games industry, by online games.
The study points to social games which are increasingly being perceived as viral mechanisms that help promote qualities of cooperation and healthy competitiveness.
Incremental improvements in the quality of social games and superior in-depth gameplay have over the last couple of years, encouraged ever greater numbers of consumers to access the social gaming scene. The simplicity of gaming formats and easy accessibility over social networks has thrown open these games to a much wider community, including non-gamers such as housewives and busy professionals.
Although the demand curve slightly leans towards the younger generation, social games transcend the age factor, even appealing to senior citizens, the GIA study found.
The number of social network users already accounts for over two thirds of total Internet users and continues to grow rapidly, which makes social networks a fertile ground for proliferation of social games.
Providing free-to-play game offerings, social networking sites have converted non-gamers into active gamers and even occasional/casual gamers into serious social gamers.
Presenting live updates on the progress of a user in the game, social networking sites have brought the competitive element into social gaming, making it a big hit among gaming communities and general users alike.
The rapid growth in broadband Internet penetration is also helping boost the social gaming market across the world. Broadband connectivity at homes provides higher bandwidth and enables users to enjoy superior services, such as downloading high-quality streaming video content, and online games. By virtue of the superior surfing experience extended by broadband, broadband-based users typically spend more time online, thus driving commercial opportunities.
The upward trend is being boosted by the launch of consoles with online capabilities and wireless phones capable of supporting games downloads.
The introduction of smartphones such as iOS and Android based phones and tablets with built in social gaming features are also helping to increase traffic to social games.
GIA researchers predict that in the years ahead, social gaming is expected to get more sophisticated, and gain more popularity with users. New games will create innovative social experiences using information regarding real-world hobbies and interests of users.
There will be an increase in ARPU rates, thanks to the introduction of novel payment initiatives such as universal payment systems launched by Facebook that allow users to buy credits and spend across different games.
Increased penetration among Asian markets especially will add vigour to the global market, which will continue to prosper through greater participation from current users and viral participation from new users.
The GIA report “Social Gaming: A Global Strategic Business Report” provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections by annual revenues for major geographic markets including the US, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia and Rest of Europe), Asia-Pacific (Australia, China, India, South Korea, and Rest of Asia-Pacific), Latin America.

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