Monday May 21, 2012 : IS THE SOCIAL GAMING PHENOMENON SLOWING?
Independent research suggests slower growth now evident
In a week where the IPO of social gaming giant Facebook sent investors into a buying frenzy, and new social gaming ventures proliferated, a US independent research organisation sounded a sobering note, claiming that growth in the sector is "slowing considerably".
Perhaps triggered by the increasing focus on social gaming, the news surfaced in a press release dated May 10 from New York-based Frank N. Magid Associates, which reported on a study it had conducted in late March of 2012.
The research found social network gaming user growth has slowed in the United States. About two in five (38 percent) social network users, up slightly from 36 percent in 2011, said they regularly play games on social networks.
"Social network gaming has decreased among its primary demographic, females age 12-44, with less than 43 percent of users age 12-17 (down from 54 percent in 2011) and about 36 percent of users 25-44 (down from 40 percent in 2011) reporting playing on a weekly basis," the report reveals.
The upside is that there have been substantial increases in older age groups playing social games online, including males age 45-54 (up 15 percent from 2011) and 55-64 (up 9 percent from 2011), and females 45-54 (up 9 percent from 2011) and 55-64 (up 10 percent from 2011).
The Magid study also reports that consumers playing social network games say they will reduce the amount of money they spend on such games over the next 12 months. The average social network gamer who spends money on these games indicates that they are spending $51 vs. $78 last year on average.
This year 34 percent of gamers say they are planning to spend less on social games in the next year vs. 22 percent who say they will spend more.
Consumers who play games on video game consoles indicate they expect to increase their spending on console games. One area expected to see an increase in spending in particular is Downloadable Content (DLC) for gaming consoles.
A third of console gamers (33 percent) say they have bought DLC in the past with the average DLC consumer currently spending about $50 per year. Spending is expected to grow in the next year to 45 percent of gamers. This percentage includes those individuals who have not bought DLC in the past but plan on buying in the near future.
In order to buy DLC a gamer needs to have a console that is connected to the Internet. More than two-thirds of Xbox and PlayStation gamers in the U.S. go online multiple times a week using their console. Non-gaming activities now account for about a third of all time spent online on a connected console among those gamers. According to console gamers, online access is driving more spending and playing on their console.
Online play has shown no signs of slowing; in fact online console player penetration is likely to grow by 10 percent or more next year as more console players are connecting for the first time.
Additionally, consumers clearly want cross-platform connectivity, with more than half of Xbox and PS3 owners wanting access to their game networks via their mobile phones.