Why the Facebook IPO affects gaming

You have probably already noticed, if you play games on Facebook, that one of the key social aspects, that of gifting has been having a few problems recently. You may even have noticed that some games have begun to remove gifting altogether. You may, if you are of a certain mindset have begun to wonder why this is happening. Well, the reason goes back to the analyst reports that came out as part of the Initial Public Offering (IPO) of Facebook. Hidden away amongst the hype and the questions over value and the uncertainty over marketing revenue were reports on that other significant revenue stream, the money that game players pay to game producers in order to gain an advantage within the game, paying to buy hard to find items or rare boosts. Now, of course, it is perfectly possible to play most Facebook games without paying anything at all, but where is the fun in that? Game producers know perfectly well that people are naturally competitive and the revenue generated by people seeking an advantage has always been good. Of course Facebook has always taken a share of the revenue, and at the time of the IPO it was running at something like $1.9 billion dollars a year, which is not to be sniffed at.

Of course, in the world of public corporations, and the drive for returns on investment and keeping shareholders and more importantly, bankers, happy, this is an opportunity. Imagine if all those gifts that your friends send you every day, all those little helping hands were suddenly removed? What if you could still get them in the game, but the time taken to do that was rather high? Wouldn't you be tempted to maybe speed the process up a little? Maybe invest a little of your hard earned cash to make up the missing help from friends? It might even tempt you if you have never even considered paying for your gaming before, especially if the cost wasn't all that high. Of course, if that was the case, Facebook, and therefore Facebook investors would get a nice little boost in revenue for very little effort. Isn't that nice! Of course, it could just be coincidence, but add to this the previous change in the way people pay for game credits. Remember when you bought the game credits directly from the game producer? There wasn't much of an announcement but suddenly about six months ago you stated to buy Facebook credits that were then converted into game credits for your specific game of choice. This quite nicely allows Facebook far more control over spending on the site, and it is of course only coincidental that there is always a discrepancy in exchange rates between facebook credits and game credits.

What can we expect next from the newly corporate social networking site that we all love? Well, facebook is still saying that it will always be free and that might well be the case, but what about subscription gaming? The model is already in place, World of Warcraft being the obvious example, but would social gamers stand for this? It is interesting to note how many people become addicted to games on facebook. Far more so than in other environments, and this will make it far harder for people to throw away all that gaming enjoyment if the subscription is not too high. We will have to see where things go on this one, but don't be surprised if the cost of your enjoyment of gaming on facebook slowly starts to creep up. But hey, it's only money.....

Facebook and the mystery of the reactivated accounts

Reports are coming in of facebook users suddenly finding their friend counts doubling and even trebling overnight with no associated notifications, so what is going on? Well, there are a couple of possibilities here, and as yet no-one is sure which is the most likely, or indeed, the most scary. I think most people already know that when you deactivate your facebook account it isn't deleted from facebooks servers. You know this because you have the option to re-activate it, something you couldn't do if it was truly deleted. So, there are all these dormant accounts sat there, with access to all sorts of data and all sorts of friendship networks....wouldn't having access to those make quite a juicy prize? For a marketing company, say? Or a government organisation? Well, lets get hypothetical here just for a minute. Lets say that you were a senior facebook insider and you were watching your share price tank. Now lets say that someone came along and said “We can make this problem go away if you do a little something for us”, and lets suppose that that little something was granting access to deactivated facebook accounts and all the goodies that come with them.....

Scary stuff huh? Well, it gets worse. By granting access to deactivated accounts, not only has the group involved got access to personal data on that account but it has also got an opportunity to probe deeper into the friendship networks and groups associated with that account. Don't believe that this could happen? Let me tell you a little story. Once upon a time there was a company called Zynga, and its shares were doing badly, and it had a little game called Castleville. Now Zynga relied for its income on creating quests in the game that people had to wait ages to complete with requests to friends, or could get a head start by paying to complete. Now some players decided to set up facebook groups to organise “gifting” groups so people wouldn't have to pay Zynga. Zynga weren't happy about this, and shortly thereafter some of these groups started getting requests to join from people that no-one in the group knew. Odd, they thought, and odd it was, as those groups that accepted these new members found themselves reported to facebook and closed down....coincidence? Really?

It gets worse than that though. Under new UK, and shortly, US legislation, your facebook account will be admissible as evidence in court. Now that really is scary! Have you ever posted anything about work? Or about that social group you go to? Or maybe about dope? Or getting drunk? Maybe you want to think about having a bit of a check on your account and having a tidy up? I would if I were you! After all, walls have ears, even your facebook wall!