When I started this blog back in early 2009, I was musing about Amazon selling MP3s and nascent measurement of user sentiment via social media. Then in June of 2009 I finally started playing with data around Facebook games. This was all pre-Farmville and it was still the wild west, which meant on Facebook you could actually build a business (and attain user data) depending on how fast you could move. Zynga built its business on moving fast.
October of 2010, shortly after we released Cupcake Corner as a dessert-themed Cafe World knock-off while at OMGPOP, marked the end of Facebook as a platform for “social” or “viral” growth.
I remember it well because shortly after we released, we were at the FB HQ and heard Zuck announce big changes to the Facebook newsfeed algorithm, which lead down the long path to gating access to users. It impacted games, but it also impacted businesses who had invested in generating large audiences on the platform that, over time, Facebook would make you pay to actually reach.
And that’s the rub – in the early days you could engage users on the platform and bring them into your experiences outside of the platform; then you pretty much had to build a business WITHIN the platform, but users were relatively easy to get via virality; today Facebook wields all the levers to drive traffic to a business built within Facebook. Why invest in building something on Facebook when they can slowly squeeze your ability to grow and profit?
There is a little bit of the old “wild west” game development experience happening in Messenger games which are slowly being migrated into the main Facebook app with its own tab. The games are channeling some of that PvP magic with a hint of old-school virality, and Facebook is providing developers incentives (promotion aka cheap traffic) to build games there, but ultimately Facebook owns your users (and over time will extract more from you to reach your own users) and with more developers vying for eyeballs, you’ll have to pay to maintain the traffic you see during these early days.
Apple as a platform had had similar promise early on, leaving a window for developers to build a booming business. Here Apple exchanged the value of their platform for 30% of your profits, but it was a pretty huge audience. Eventually, once the app store platform got saturated, user acquisition got expensive and pretty much priced out smaller game developers.
Now with the introduction of Apple Arcade – at a ridiculously low price point of $5 a month – focusing on apps from a select few developers, they have relegated the rest of us to the morass of the over-saturated app store (where paying 30% for the privilege now seems overly exorbitant for the access what Apple provides).
On top of that, I’ve seen that Apple is jumping into the mobile acquisition ad market with its deep pockets to promote Apple Arcade and drive subscriptions. I can only guess this spending will drive up the cost of acquisition ads developers use to drive app installs, adding a bit more salt to the wounds. Analysts are predicting Apple will have 12 million paying subscribers by the end of 2020.
Early in the last decade, companies like Zynga, King and Super Cell were built by the reach of the Facebook and Apple platforms, but as the decade came to a close, the platforms have become the powerful gatekeepers and ultimately are moving to not only own the customer paying relationship (ad views on Facebook, direct payments on Apple), but the user experience as well.
