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.
Anyone who has been in online publishing (I just had a stint at Playbuzz.com running their owned and operated sites) has experienced first hand the decline in traffic coming from Facebook. Digiday recently cited SimpleReach showing drops of 32 percent or more since the beginning of the year.
Let’s be clear, third-party links aren’t dead – they are just de-emphasized in the typical user’s feed depending on how frequently a user visits and interacts with friends and brands (publishers). A Facebook user’s feed is customized based on the recency and frequency of their interactions with friends and brands as well as time spent looking at the content those friends and brands produce. But third-party content – stuff created by publishers and brands that users end up sharing – definitely has been de-emphasized over the last year. In reaction to what Facebook saw as abuse of their algorithm and a lot of click-bait driven tactics by publishers, they changed the algorithm to favor friend posts over page posts. Including all the other changes in the last year, you can paraphrase Facebook’s newsfeed strategy as follows:
Higher emphasis on things posted directly by users (status updates, photos shared, check ins, events, Instagram images)
Higher emphasis on things posted directly ON to the network by publishers (video and instant articles)
De-emphasize the weight of things posted 2nd-hand (the traditional links to articles on publisher web sites)
Remind anyone of the FarmVille days?
Even though I knew all that conceptually, it wasn’t until I stepped away from my newsfeed for over 24 hours that I really began to understand it.
So here’s the experiment: I (some would say insanely) did not look at my Facebook feed for over 24 hours. I then went through the first 59 posts in my feed on my mobile device. Then I switched to my desktop and reviewed the first 60 posts. There were no duplicates – Facebook knew I had seen the 59 items on my phone and did not include them when I switched over to my desktop. So nearly 120 posts later, there were some really interesting insights:
The majority of my first 60 posts were friends status updates, photos, videos (I classify Facebook-owned Instagram reposts as not a 3rd-party link) — only 5 in my first 59 posts were 3rd party link/video posts.
In fact, the first 3rd party link I came across was the 35th post in the queue – relatively low down
I saw four of the in-line ad blocks before coming across a single third-party link
Ads show up neatly every 10 posts, so we can actually look at the percentage of 3rd party links based on the set of 10 posts – and that’s pretty illuminating:
Clearly third-party links only begin to show up as the number of user-created posts begins to thin out. Publishers that are relying on Facebook automatically get pushed to the back of the line and then they fight amongst themselves based on the popularity of their links
As a publisher, it’s clear that the days of viral within the feed have changed dramatically as 3rd party links are de-emphasized over user-created content. You can see that ads are the only way to break through all the user-created posts at the top of the queue – a boon for Facebook, but a real jolt to publishers who don’t have a ton of direct traffic and are looking to build their audience.
For the geeks – the raw data
Listed below on each line is the type of post I saw in my feed from the top to the bottom. Items in bold are items that I deemed as items shared as third-party link, video or photo.
ON THE MOBILE DEVICE
status
ad
status
status
photo
status
friend posted video to a group I’m in
status
status
Instagram post
ad
status
status/photo
status
photo
photos
status/photo
checkin
status
status
ad
friend posted photo
friend posted photo
status/photo
check in
“listening to” a song post
status
status/photo
friend tagged in a photo
photo
ad
photo
status
friend tagged in a photo gothamist article shared Cards Against Humanity link shared
friend posted photos to a group I’m in
status/photo
status
friend shared memory
ad
status/photo image shared by xkcd.com
image
photos
photo
status
status shared image from a FB page
ad soundcloud link shared
friend tagged in photo
photo
photo 2 friends share a post from emilycheath.com on starbucks red cups
photo
friend tagged in photos
friend updated cover photo
ad
THEN TO THE DESKTOP
starbucks groupon shared
ad wtvr.com article share nerdist.com article share huffpo.com article share brooklynvegan.com article link notrightinthehead.com – image share
friend changed profile picture businessinsider.com article share
ad
friend tagged in photo
photos
friend interested in an event
instagram share housebeautiful.com article share status/youtube video share oculus.com link share shared mashable.com link with status
ad
friend changed profile picture
someone commenting on my post
memory dailymail.co.uk article share
video posted in group I’m in friend posted Nova 106.9’s video
friend going to an event video shared by two friends theatlantic.com article shared share of someone’s twitter handle
ad Missy Mwac video shared Michael Franti & Spearhead video shared link shared link shared Isha Foundation photo shared Reddit.com article shared Collegehumor.com video shared
ad Paolo Tuci video shared newyorker.com article shared
event shared video shared video shared npr.org article shared image shared awesomethings video shared daily graphic video shared
ad
photo xkcd.com article shared montagne-en-scene.com article shared video shared
friend’s birthday
updated cover photo mlb.com article shared video shared (3rd party)
photo
photo
ad youtube shared
I’ve spent the last four years on quite the ride, so pardon the long absence. I jumped into OMGPOP in 2010 as the product lead for a Facebook game; we delved into mobile apps in 2011 as the market shifted and then I was fortunate enough to be part of the crazy explosion of our game Draw Something. After getting acquired by Zynga, I jumped crosstown to FreshPlanet to grow and monetize SongPop as well as try to develop more social causal mobile hits. And here in 2015 I’m watching the market shift yet again as mobile game developers are now turning to traditional brand marketing by spending tens of millions on TV ads.
So here’s a couple things I’ve observed along the way:
#1 Overnight success takes years to perfect
Two of the biggest hits I’ve been associated with (Draw Something and SongPop) came after years of iteration.
Draw Something started off as a real-time flash game Draw My Thing on the now defunct OMGPOP.com site (but you can still play the embedded game on sites out there if you are looking for it). Drawing with your mouse sort of sucked but it was fun in real time – you had to beat the timer and draw well enough that others in the group could guess it.
Before Draw Something on mobile, there was Draw My Thing on OMGPOP – a synchronous game where you had a timer to draw and other users tried to be the first to guess the word you were drawing
We ported the game to Facebook which greatly expanded the audience, peaking at about 2.1 million Monthly Active Users (MAU) – but that was a mere blip compared to what we saw when we jumped to mobile. The iterations on mobile were huge: In 2012 doing real-time mobile play wasn’t an option so we shifted into asynchronous game play; the clock and “winning” or “losing was eliminated; and typing out your guess on a mobile device was a pain, so we shifted to a sort of scramble-like listing of letters from which to make your guess.
Before SongPop, an initial iteration was The Crazy Cow Music Quiz
SongPop too had an earlier incarnation – can you believe The Crazy Cow Music Quiz? Obviously we ditched the cow, and a bunch of pre-game power ups, opting for a simpler and more direct game play.
Neither of these game ideas were a success overnight. And that’s about the same for every indie darling that makes it big, the latest being today’s #1 hit Trivia Crack by Etermax. Trivia Crack was built on the success of its Spanish-language version predecessor Preguntados which was built on the success of it’s Scrabble-like game Adworded which was built on the company’s past experience as a third-party developer.
#2 Sometimes there CAN be too much of a good thing
People binged on Draw Something similar to the same extent people now binge on NetFlix – games now have to figure out how to not let the player get sick of the game and burn out
When Draw Something first came out, it was like crack. People couldn’t get enough of it. They played non-stop, during class, over night – it was this incredible social binge event. But unlike binging on Breaking Bad episodes on NetFlix, when you were “done” on Draw Something, there were a ton of opponents waiting for you to draw back. Unlike Scopely’s Dice with Buddies where a round is literally a couple seconds, Drawing took quite an investment of time and thought. That’s cool with three or five of your close friends, but having to draw for 50 people gets a bit overwhelming.
When Zynga bought us, Draw Something was barely a month old and no one had a clue what the eventual retention curve would look like. I won’t second guess anything we did in Draw Something to become such a cultural phenomenon, but today social mobile games put a lot of effort into gating the content a bit, to get users to stay a while instead of binging and leaving.
SongPop limits the number of opponents you can have at any one time. Many games like Two Dots or Candy Crush have “life” systems – you lose lives when you fail a level and either have to ask friends, wait or pay to regenerate those lives and keep playing. Trivia Crack sort of combines the two – limiting opponents you can play by a “life” system. The balancing of these gates and when they appear are key both to monetization, but also regulating the consumption of your content.
#3 Deja vu all over again
When I was younger, I remember a movie would stay in the theaters for weeks. Today, most movies are gone in a flash — maybe two weekends at the cineplex and then gone. But hits last longer – just not as long as they used to. In 1977 Star Wars was in 40% of it’s max theater release for 29 weeks. For last year’s Guardians of the Galaxy, it was in 40% of it’s max theater release for only 10 weeks. The economics have changed – there are about 4x as many theaters today so more movie-goers can see them in the first couple weeks. Looking ahead it’s becoming more clear that theaters will eventually give way to direct-to-home streaming.
Hit games like Luxor would remain at the top of the charts for six months before the downloadable PC game market got saturated
When I was marketing downloadable games in 2005, a hit game like Luxor was at the top of the sales charts for six months – a game we all called a “AAA” game back then. Within two years the top selling game was at the top of the charts for just two to four weeks. The economics changed – there were 3x as many games being made. And then this little platform called Facebook started making it easier for users to get free games instead of paying $9.99 a pop for the downloadable game.
Are we seeing a similar trend in mobile? Saturation makes it hard for a new game to get heard. The majority that do break through — with either a burst campaign or the lottery ticket of an Apple feature — don’t end up lasting long on the charts.
Developers in the download space tried to pivot to Facebook games, but it was the early adopters on the platform like Zynga and Playfish that were able to take advantage of looser viral channels. Few other developers were as successful than those early entrants on the Facebook platform.
Are we seeing a similar trend in mobile? Over half of the top grossing games (Clash of Clans, Candy Crush, Big Fish Casino, Hay Day, Soltomania) were released in 2012 or earlier. In 2012 there were 500,000 apps to compete with in Apple’s App Store – today there are 3x as many. The companies that were able to establish hits in or before 2012 have been able to maintain those franchises as early adopters on the platforms.
King.com has saturated select cities with branding campaign for Candy Crush Soda Saga – including the tops of yellow cabs in New York City
So while we all know it’s been getting more and more expensive in the last two years to create a new app (more depth and polish required) and acquire new users (CPIs easily can climb over $3), the money accumulated by these early adopter developers have allowed them to grow and move to an entirely different level: full-fledged brand marketing (cue Kate Upton). With city take overs by King.com and apps buying commercial time during NFL football playoff games, these are the marketing tactics that a small to mid-size developer can’t even begin to compete with.
So what’s an indie developer to do?
Well the great thing is that based on #1 above, there’s always room for iteration and innovation. When you can provide a unique experience, tell a unique story, change the way you interact with a device, then you might be able to find that big hit. Just realize you might have to fail 20 times to get there.
Second, be on the look out and try different platforms. Facebook disrupted the downloadable/PC games market and created new developer power houses. Mobile disrupted the Facebook games market hierarchy and has created new developer power houses. Eventually new platforms will come, we just don’t know where. So innovation and iteration is key for the indie developer to find a new market where they can be successful. Can someone crack Instagram and Twitter to create a new mash up of game play with social? I’m betting they can.
But this is my big question going into 2015: Can the medium-size developer shop survive? Or will we continue to see consolidation with a bunch of power house developers and a lot of small 1-3 person teams trying to create something new and unique?
