As Facebook strives to grow its monetizable arms (advertising and digital goods from apps), one section is showing positive improvement -- games. The social networking giant, known for its close relationship with the now plummeting and erratic Zynga, has seen an 15% growth in the number of people playing games on its site since January.
With 235 million people gaming away, Facebook sees a bright future in the games section of its new App Center. Since launching the App Center in May, the company has seen 2.4 times more installs of apps and a next day return rate of 35%.
While these numbers are headed in the right direction, they also could use a boost before investors start smiling away, especially since there are 955 million monthly active users on the site, with only a quarter of people playing games at all there is a wide margin for improvement.
Facebook points out that five of the top 10 developers are European: Wooga, King.com, Peak Games, Rovio, and Social Point. That is a sizable shift from just European developer in the top 10 last year and shows just how mobile these categories can be -- one day your game is hot and the next day sue one else has stolen your audience.
The number two games developer following Zynga, on Facebook, is King.com. With Candy Crush Saga as one of its major games, King.com brings in 51 million MAUs and that one game has 2.7 million daily active users -- a 100% jump for the month of May.
Also worth noting is the just last month, Facebook said it referred people to Apple’s App Store and Google Play more than 170 million times, via timeline gaming updates and connections. While this could seem counter-intuitive, Facebook is looking to create a fuller gaming experience and continue its foray into referral and search traffic.
“We want to drive the same type of traffic we drive to mobile that we drive to web,” said Matt Wyndowe, product manager for apps and games at Facebook, speaking today at the GDC Europe gaming conference in Germany. "Game developers find that people who sign into their mobile apps with Facebook are more engaged and spend more money.”
This gaming growth and focus comes just a week after Facebook launched its first real-money gambling game, dubbed Bingo Friendzy. Available exclusively to UK residents over the age of 18, this opens the door to a greater revenue stream related to digital goods -- but with real money.
This was a HUGE first step to help Facebook diversify its monetization and bring gambling possibilities onto the largest social network.
Granted, this is only available in the UK, but it is clear that Facebook will want to roll this service out to as many countries (and possibly states) as it can, especially since the revenue that it has been raking in from the digital goods portion of its company has been rather stagnant the last three quarters at around $180 million - $192 million (that's less than 20% of the total revenue of the company).
Facebook's biggest gaming (and digital goods) partner, Zynga, also has plans to unveil some real money gaming opportunities next year.
Facebook is using age-gating technology to keep anyone under 18 away from the app and make it inaccessible.
While the standard cut of digital goods that Facebook reaps is 30%, it is unclear if Gamesys and Bingo Friendzy have inked any different type of deal since this is a gambling service (where people can win or lose money). I would bet that Facebook has created a slightly different contract for real money services that it could use to encourage more companies to offer this service.
Since gambling is seen as more of a vice and danger than buying virtual goods, Gamesys has set up tools to help people set spending limits before they start playing and its practices are regulated by the government.
Zynga, Facebook and other companies are chomping at the bit for the US government to reevaluate the gambling laws in the States so that online companies can offer similar services here, but currently, the different states' laws create a lot of challenges for this opportunity.
Zynga Poker, alone, attract more than 7 million people every day and over 30 million each month. Many of these players would love to get a return on their recreational gambling in the gaming world if they could -- and Zynga would love to prove to investors that it can vary its revenue model from the Facebook virtual good-based focus it has had for a handful of years.
If Zynga can successfully offer social gaming, in some fashion, it could resuscitate the falling shares that have dipped below $3 recently, after a challenging IPO in December.