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At GDC Thursday, Kristian Segerstrale, CEO of PlayFish, one of the most successful publishers of games for Facebook and MySpace, talked about five lessons he thinks the mainstream games industry can learn from social games.

(Credit: PlayFish)
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SAN FRANCISCO--While Nintendo's Wii continues to outpace expectations and certain games are making fortunes for their publishers, a strong argument can be made that the hottest segment of the video games industry is one that is still in its infancy: social games.

These titles, which are popping up by the bushelful on platforms like Facebook and MySpace, as well as on Apple's iPhone, are garnering user numbers that would previously have been thought impossible. And in a deep recession, when even the strongest console manufacturers and biggest game publishers are being forced to shut down projects and lay off workers, people have no choice but to sit up and take notice.

At the Game Developers Conference on Thursday, Kristian Segerstrale, the CEO and co-founder of PlayFish, one of the most successful publishers of social games, upped the ante, stating his case for how the mainstream video games industry can learn from his side of the business.

In his talk, "Five lessons from social games that matter to the rest of the games industry," Segerstrale argued that while the nature of the social games business differs significantly from that followed for many years by the more traditional, retail-oriented publishers, times are changing, customers' behaviors and expectations are shifting rapidly, and the winning model may well be the new one.

PlayFish's roster of games, including the mega-hit Who Has the Biggest Brain is illustrative of the popularity games can achieve on services like Facebook. Segerstrale said PlayFish has had 60 million players, averages about 25 million monthly users and 5 million daily players, and currently has 5 of the 10 most popular applications on Facebook. And by itself, Who Has the Biggest Brain has been played a total of 500 million times by 15 million people, he said.

With numbers like that, it's clear why Segerstrale feels he has some lessons to teach the rest of the games industry. And while the traditional retail games model has been relatively unchanged for decades and remains strong today, he said he sees signs that the Electronic Arts, Activisions, and Take-Twos of the world, not to mention the countless other game developers and publishers out there, may need to rethink their methodology. sonido bleach

One harbinger of that need for change is evident even within the traditional games business itself, he pointed out. He said that Nintendo established the Wii as a sleeper hit by exploiting a wide range of people's desire to be social with friends and family. And he explained that Nintendo itself is well aware of this, as evinced by ads for the Wii that show groups of friends playing gleefully. Yet the real estate in the ads devoted to showing the games themselves is minimal; it's the image of the social activity that sells the Wii.

"This is about you and your real-world relationships," Segerstrale said, "which is ultimately much more important than anything that happens between you and your screen...That's why you're playing. You're playing together, not because you're trying to beat the boss in level 10."

500 million and counting
In the last few years, Segerstrale said, the size of social networks' user bases have grown to about half a billion, not counting China. All told, with China in the mix, he said, there are probably a billion people worldwide using services like Facebook, MySpace, and the like.

And because of how easy those services have made it for developers to create and distribute social games, titles that are built around social activity between friends, co-workers, family members, and so forth, there seems to be almost no limit on how many games can become successful, sonido bleach and even how many can make money.

But the business model is clearly quite different. Where the retail model relies on consumers being willing to pay up to $60 up front, often for the opportunity to sit down in front of a big TV by themselves, social games are almost always free to play. The monetization comes when a social game publisher figures out how to attract a sizable audience and convince many of those people to engage in relatively cheap microtransactions for any number of things: level-ups, game gear, music, or whatever is on offer. Advertising is also a possible revenue producer.

The distribution model is also vastly different. Where retail games depend largely on gamers picking titles off of shelves, social games reach users in three main ways: invites to play from friends; seeing in friends' profiles what they're playing; or seeing game titles come up in activity streams.

Five lessons
With all of that in mind, Segerstrale said he had arrived at five specific lessons that he thinks can be gleaned by the larger games industry.

First, he said, the "era of the big game franchises may be over." In other words, where people are used to going to retailers and picking from game titles they recognize and feel safe with--EA's Madden, for example, or Take-Two's Grand Theft Auto--digital distribution could deprive publishers of the retail shelf advantage they've long enjoyed. In a purely digital domain, games spread virally, not because of the marketing might of a company able to pay for dominant shelf space and advertising.