Zynga’s market valuation has surpassed EA Sports market evaluation. Even though EA Sports is trying hands in social and acquired Playfish, their main source of revenue is still video games. Though the current user base of EA Sports (35 million) does not look impressive compared to Zynga’s (258 million) but a viral game from Playfish can always turn the table.

There are a few salient factors present in this interesting phenomenon of social games vs video games:

  1. Our attention span is getting shorter and distractions are increasing
    social games perfectly fit this picture, they don’t require hours and hours of dedicated effort to play, chat, mail checking, status updates and posting on the wall can all be done while playing them.
  2. Presence of social and mobile layer in online social games
    Unlike resource hungry video games, they do not require dedicated hardware and you can ask your friends for extra sheep (err, help) for the farm.
  3. Less (or usually zero) upfront payment
    In-game processing is the main source of revenue in the case of social games as compared to video games.
    Being in small chunks, the monetization of social games is easier.
  4. Demographic trends
    1. There is an upward trend in earning women which benefits social games more than video games since
      % female players of social games = 60% [source]
      % female players of video games = 40% [source]
    2. Growing percentage of the middle-aged population(34-60) [source] which prefers social games over video games
      Avg age of player of social games = 48 [source]
      Avg age of player of video games = 34 [source]
    3. non-increasing 15-34 population [source] which is the niche market for video games.

A few implications are subtle here for all tech-related industries

  1. Demographics is changing rapidly (in the developed world)
    The average consumers are not only getting older in age but now there are more females consumers as compared to males.
    Hence, anything which focuses on youth or males (or at worst young males!!!) finds a stagnant consumer base.
  2. Presence of social, local and mobile layer plays a major role in the success of the product.

This is my personal blog. The views expressed on these pages are mine alone and not those of my employer.