Facebook social gaming revenue, Farmville and Zynga IPO

 

By Posted 2 Jul 2011, 13:46

The success of Facebook is known worldwide and the movie about the popular social networking site only helped increase the publics understanding of how fast the service expanded. It was obvious that Facebook’s success would breed more success, which would be both for the owners and for spin-off services and products.

One of the biggest games that grew fast thanks to Facebook was Farmville, which is still the biggest game on Facebook and this gives you a taste of the potential for Facebook social gaming revenue. Zynga, the creator of Farmville, has integrated social features into the game, which includes inviting your friends and family to be neighbors and allowing them to help you with farming. Not to mention the ability to help each other out with supplies and gifts.

The social experience has been rewarding for both the user and Facebook, which has recently announced their target for $1 billion in social gaming revenue this year. Advertising will drive the bulk of the revenue, although Facebook credits are included in the forecast. 2011 has seen companies’ increase online marketing spend and this includes the opportunities they have with Facebook ads, which is helping Facebook push towards a $4 billion turnover this year for ad spending. That’s some amazing growth when you consider last year it was $2 billion, and seeing social gaming playing a 25% stake in this years ad spending only highlights the importance of this area of business.

Back to Zynga who is the most dominant social games developer on Facebook. Zynga’s IPO filing is said to be valued at around $1 billion, and showing the success that one company has had with the help of Facebook. The current estimated value of Zynga is $20 billion, which will blow some peoples minds when you think Yahoo is valued at around $20 billion.

Zynga has changed the way some developers’ think about free games and how to monetize them. The industry is changed forever, and the need for making a multimillion-dollar game is not the same anymore. Like Google started, a less more simple approach can sometimes be a lot more.

Do you play Farmville, and if so what kept you hooked?