Google plans social games platform to compete with Facebook
Google Inc. is planning to debut a platform for social games that would compete with offerings on Facebook Inc.
The Silicon Valley search giant has approached developers to put their games on Google’s new social networking service Google+, according to people knowledgeable about Google’s plans who did not want to be identified because of confidentiality agreements. The plans, reported Friday by technology blog AllThingsD, could be announced as early as next month, they said.
A Google spokesperson declined to confirm the report, saying only that the company plans “to add a lot of features and functionality to Google+ over time.”
Google is trying to counter the growing reach of Facebook, which is competing with the Internet search giant for eyeballs and advertising dollars. An investor in San Francisco social gaming company Zynga Inc., Google aims to keep Facebook from dominating the lucrative market for social games, which has become a major revenue stream for the world’s most popular social network.
Google+ is Google’s most aggressive effort yet to crack the evolution of the Web from a place that connects people to information to a place that connects them to one another. It has amassed 20 million users in three weeks, according to research firm ComScore Inc. The addition of social games could liven up Google+, which has far fewer users than Facebook’s more than 750 million and fewer bells and whistles. Google+ still requires an invitation.
The market for social games in the U.S., which reached $1 billion last year, is projected to reach $5 billion by 2015, said Pietro Macchiarella, a game analyst with market research firm Parks Associates. Much of the revenue comes from games played on Facebook.
Facebook requires makers of applications on its platform to pay 30% of revenue collected from selling virtual items on the network. One way Google could compete is by offering to take a smaller portion of game publishers’ revenue.
Google’s success in recruiting publishers, however, will hinge on its ability to continue its momentum in adding users to Google+, Macchiarella said.
About 250 million people play social games, but only about 2% to 3% of them spend money on virtual items or power-ups that enable players to advance faster in those games. That means social games require a large pool of players to cull a handful who will pay.
“Most publishers will be happy to extend their offerings to Google+,” Macchiarella said, “but the significance of their business on this social network will be intrinsically connected to the success of Google in migrating people from Facebook.”
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