Gamification and social gaming are two trends that are taking social network communities to an entirely new level.  Although very different animals, the growing popularity and fast-moving industry is catching the eyes of both investors and the technology-savvy public.  As recently as this week, RIM acquired Scoreloop and is pushing to get into the mobile social gaming network.  Why?  The possibility to be a part of another successful IPO (like the recent LinkedIn offering) in the games industry makes the possibly substantial return on investment alluring. Even the most financially-shy investor is watching to see what happens (See Up Next for Tech IPO’s: Social Gaming).

Social Gaming, What’s the Big Deal?

Why are investors ready to jump into the already heavily-crowded gaming industry? Social gaming is about the user experience and competition. Take Farmville for example. You must have a Facebook account in order to be able to play, and can request, compete and socialize with friends to grow your status.  Social gaming is also heavily app-driven, with most social based games available on your smartphone.  Consider how often you may find yourself commuting to work, or waiting for someone, and automatically log onto your phone and start playing a game.  The user investment in a game is generally a minimal cost, of any (typically ranging form $.99 to $2.99 on average) or close to the cost of a good quality coffee.  Keeping in that in mind, it’s still a billion dollar annual business.  Given that gaming is becoming a second nature reaction, start-ups are hoping to catch the interest of investors and get a cut of the pie.  With the prospect of Zynga Preparing to File for IPO [REPORT], the gaming industry is about to take a new step with investors salivating to get a piece of the action.

What About Console Games? Where’s their future?

Console games as a whole are starting to flatline.  Even Call of Duty: Black Ops, which hit record sales upon release, has slowed significantly with interest turning more and more towards online, social and incentive-based game experiences. Strong game titles and potentially repetitive story lines are starting to lose the interest of the gaming community.  However, some companies such as EA games are jumping on the social gaming platform as opposed to fighting against it. With the wildly popular The Sims now coming to Facebook,  players will be able to socialize and fraternize to their hearts content all through their smartphones.

Change in Demographic

The beauty of social gaming is that the demographic is no longer narrow or typical of the gaming community. Both women and men, in multiple age groups are participating by downloading and engaging in game play. The average age for participation is also widening, with children in the United States as young as two playing (see Kids Online Game Moshi Monsters Hits 50 Million Registered Users). This coupled with mobile access is looking to be one of the largest trends in social media for 2011.

Subscribers to our mailing list should keep an eye out for SMG’s mid-year 2011 Trend Report – we’re working hard to compile a social media state of the nation and our point of view on the evolution of the big trends.

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