Recent Trends in the Social Games Industry

Social games are one of the fastest growing segments of the online gaming industry. According to the industry body, Entertainment Software Association, social games increased in popularity by over 50% last year. Together with casual games, social games account for the largest share of online games played most often, with their share being even higher among the games frequently played on mobile. Social games are popular not only among the tech-savvy youth, but also adults. The International Social Games Association reports that the average age of a social game player is as much as 40 years. Overall, close to half of gamers engage in social games.

Social Gaming industry, featured on

Increasing popularity among gamers and spread of "freemium" pricing model leads to growth of social gaming revenues.

The share of social games is forecasted to get close to 50% of the total online gaming market in a few years. The world’s number one social network, Facebook, generated over 2 billion US dollars for developers from the gamers’ purchases of virtual goods in social games via the network’s payment infrastructure.

Naturally, game publishers are striving to gain a larger piece of this growing pie. Industry sources reported to Forbes that in the last two years the number of social games multiplied from below one hundred million to several hundred millions. Video game publishers are continuing to acquire social game developers and trying to make their games more available and attractive for social gamers, such as making them free-to-play on social platforms and installing in-game social functionality, e.g. video chat with friends in the new versions of Wii U and Xbox 720. Meanwhile, social game makers are engaging in mergers, acquisitions and partnerships to strengthen their position in the segment.

Boy_playing_social_game_on_tablet, featured on take on multiple platforms

A significant trend visible from mergers & acquisitions and other industry news is game publishers trying to conquer multiple platforms utilized for gaming: mobile devices, consoles, social networks, browsers, etc. For example, one of the global gaming industry leaders, EA Games, made a strategic move in 2009, acquiring mobile gaming firm Glu and social games developer Playfish. Meanwhile, Zynga, one of the largest social games publishers, made efforts to become "less tied" to Facebook and recently acquired mobile game app developer NaturalMotion upon seeing that mobile users account for the largest share of its audience growth.

Publishers look to increase monetization

Staggering growth and intensifying competition aside, the core issue for social games is monetization. A free-to-play and pay in-game concept known as “freemium” has become very popular. However, only a small share of gamers actually spend money on free games. According to a survey conducted across several countries, as reported by the International Social Games Association, less than 10% of social gamers pay, and those who do only spend small amounts, usually less than one unit of local currency.

What publishers can do is work on scale and attract more users so that even these small numbers can pay off and, at the same time, entice a large share of players to pay for virtual goods and upgrades in-app. Industry experts advise various ways to achieve these two aims. Trying to engage players over time is one, for example, by adding new content on a constant basis, so that the game is kept up-to-date and dynamic. Another is to make social games intrinsically fun, so that a gamer feels that it delivers some type of value. A clever free-to-play monetization strategy should be chosen, so that it incentivizes gamers to pay money while playing, without forcing them to do so. Finally, when gamers actually make a decision to pay in-game, they should be offered convenient payment methods to choose from.

For more information on the global online gaming market, check out's full report.

Global Online Gaming Market 2014  Market Research Report

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Editor's Notes:
This post was written by Tatiana Teplova, Research Analyst at GmbH & Co. KG.

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