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Portrait of a Facebook Hangover

May 9th, 2010

Cross-posted from David’s blog, Game Tycoon.

I’ve been casually tracking the daily active user numbers for the top 40 Facebook game developers for the past six weeks. Why the top 40? Because that’s the quantity displayed by Appdata.com on the first of 200 pages. Why daily active users? Because monthly active user numbers are widely considered to be an unreliable statistic for Facebook games, whereas DAU is, if not perfect, at least more directionally accurate.

I was mostly curious to learn how “hit makers” are faring on Facebook. (The 40th developer on the list has just 200k daily active users, so it’s safe to assume that all the heavy hitters are represented in the top 40 list.) Facebook’s total population has supposedly been growing by leaps and bounds over the past several months — it jumped from 350m “active” to 400m in the three months leading up to February 2010) so theoretically daily active users for the top 40 game developers should be growing as well, if for no other reason than there are more potential customers on the platform. However, it turns out the DAU count is down slightly since March.

How about Zynga, the king of Facebook?

How about EA+Playfish, Crowdstar & Playdom (2nd, 3rd and 4th place behind Zynga, respectively)?

All flat-to-slightly-negative, with the exception of EA+Playfish which experienced a small increase in DAU over the same time period. Coincidentally, Gamasutra and Inside Social Games jumped on this story on Friday (two days ago), identifying the falling active user numbers and blaming the drop entirely on “recent changes in the way Facebook manages notifications.” You should be skeptical about that assertion. While changes to FB notifications may well be having a significant impact, the larger issue is simply that Facebook has clearly entered the inevitable misery phase, which I predicted just a few months ago.

The Facebook game development scene has become crowded. Facebook’s platform managers are making decisions that are unpopular with many of their developers and looking to monetize developer activity more aggressively. And the average “hit game” has yet to shift from the “early glory” stereotype to the Facebook game of the future (whatever that might be.) To use a historical example, Facebook is like the MMO market when it was all about Everquest — just waiting for a World of Warcraft to show people what a truly successful social game actually looks like. Of course, Facebook’s WoW won’t look anything like WoW itself, and may not even have a higher development budget than the games launching on Facebook today. It will definitely have a better retention rate, better monetization, and better (less spam-like) viral functionality.

Remember all those VCs and pundits saying it’s too late to become a top dog on Facebook? The guys currently choking the halls of one-too-many social gaming summits? To heck with those guys. The next several months (and perhaps longer) are going to be very ugly for the Facebook game development community. Lots of small developers are going to lose money. We may even see a big Facebook developer collapse under the ungainly weight that they have packed on while attempting to bloat their revenues pre-acquisition/pre-IPO. But this phase will end, and when it does, Facebook’s “triumphant return” is going to make XBLA’s triumphant return look like peanuts by comparison. The only question is: who will ride that wave and who will drown before it arrives?

PS. If anyone has access to the complete DAU data for Facebook — i.e. all 200 pages of it — I’d be curious to know if there’s any meaningful evidence of Long Tail activity over the past several months. If there’s anywhere the Long Tail should be manifesting itself, it’s Facebook IMO.

PPS. If you’d like to download the data I used for those charts, please feel free to grab it here. It took a while to get the data in useable form so I’ll be glad if someone else finds use for it. :-)

Update: interesting to note that on May 7th, around the same time as Gamasutra’s article, Techcrunch revealed that Zynga and Facebook are currently in the midst of a very ugly war and Wired published an article labeling Facebook “rogue” and advocating for a new social standard. Last Friday was truly a nasty start to Facebook’s inevitable misery phase.

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