Social games may be hot, but they’re still a long way from being as lucrative a business as console games, according to analyst Piers Harding-Rolls of Screen Digest. In the US, 57 million console gamers spent $7.5 billion in 2009, while 109 million social gamers spent $250 million– thirty times less than their console counterparts. Average spend per player breaks down to $131.58 for console gamers, but only $2.29 per social gamer. While Harding-Rolls says that social revenue has increased since 2009, he says that the revenue is “slowly increasing,” in comments reported by VentureBeat.
Harding-Rolls argues that there’s a fundamental disparity in revenue opportunity between console publishing and social publisher that companies will need to acknowledge as the console market continues to contract. He says that only 2% of all social gamers ever spend in a game, while only 0.5% are “big spenders” (also called whales) who will spend $100 or more in a single game. Large companies need to plan transitions carefully so that they realign multiple market segments at once.
Of the companies currently transitioning into the new, more freemium-heavy market, Harding-Rolls pointed to Electronic Arts and Disney as having the most advanced strategies. Both of these companies spent substantial sums to acquire major social game developers (Playfish and Playdom, respectively). Harding-Rolls calls for further layoffs in divisions at these companies that deal with traditional publishing models, which are likely to continue contracting in the future.
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