Zynga has been trying its very best to diversify its business away from Facebook and it doesn’t have much of a choice. Ben Schachter, Internet analyst with Macquarie Securities went through the Facebook S-1. His take: Zynga’s fourth quarter 2011 isn’t going to be pretty.
All that virtual currency sold in mobile games is anything but virtual in terms of revenue. Juniper Research, in a new mobile games report, said revenues from mobile in-game purchases totaled $2.1 billion in 2011 and are expected to grow to $4.8 billion by 2016.
iOS and Android have tripled their mobile gaming market share since 2009. But it’s not just number of individual game sales on iOS and Android devices that’s growing: the two platforms’ game sales are affecting the bottom lines of the biggest names in gaming.
Mobile developer Gameview Studios said average revenue per user for its casual game Tap Fish is comparable between iOS and Android, and on some days Android is 30 percent higher than iOS. It shows that Android is closing the revenue gap on iOS.
Angry Birds creator Rovio is using predictive analytics software from Seattle-based startup Medio in an attempt to improve the gaming experience and keep users playing. Mobile and social games might appear to be cute diversions, but they’re generating lots of money.
Most of the money people spend within mobile games is on “consumable” items that have no lasting value once used. The most popular form of that is “premium” currency, which allows users to buy their way into advancing faster in a game, according to Flurry.
Zynga is expanding its mobile ambitions by apparently picking up New York City-based developer Astro Ape Studios. The gaming powerhouse, which is preparing to go public, has been increasingly looking to shore up its mobile efforts, which has not be as successful as its Facebook business.
Zynga released an expanded version of its pre-IPO financial document, with a lot more detail on its Facebook relationship. Some interpret the new information as showing the leader in social games being far too dependent on Facebook. Facebook gets 5-year exclusivity over games that use its platform – including Farmville – and some control over where else Zynga might distribute them. But Facebook is also sharing an undisclosed portion of the revenues generated by ads shown near Zynga games, and guaranteeing certain traffic targets. Does that mean Zynga competitors like Electronic Arts and Playdom get that kind of treatment? The document mentions a Zynga platform built on top of Facebook, but details are missing. I’d written earlier that Zynga could build its own distribution and affiliate network for third-party games – it’s conceivable this could be it. Colin Gibbs writes about how Zynga could conquer mobile. Will Facebook play a role there?
Exent is launching the first subscription mobile gaming service for Android called GameTanium Mobile, which allows users to gain Netflix-style all-you-can eat access to more than 75 games for $4.99 a month. It’s another sign that gaming on Android is improving.
Zynga is ramping up its mobile efforts as it prepares for its IPO. Here are a few key strategies the social gaming company should pursue as it prepares to take on established developers in the fast-moving world of mobile gaming.