Internet gaming operations are in decline at Facebook, where monthly active users (MAUs) accessing games declined in 2011 to just 25 percent, compared to 50 percent gaming MAUs in 2010. New users continue to swell Facebook's ranks, but fewer are using the games, according to IHS iSuppli Corp.
Rising barriers for new gaming operators is one factor, according to IHS iSuppli, but the main reason for the change is that users are flocking to Facebook for other social networking services, with fewer coming for the gaming. In fact, the gaming population leveled off in 2011, and may decline in 2012 as foreshadowed by Zygna, the most popular gaming app provider to Facebook. Zygna has dropped to 225 million MAUs from a high of 290 million a year ago.
With games like FarmVille, Zygna is still the most popular gaming app provider to Facebook, but its MAUs shrank this year, according to IHS iSuppli.
"The tone of the [Facebook gaming] market in 2012 will be somewhat muted compared to the optimistic outlook of the past few years," said Steve Bailey, senior analyst for games at IHS.
In Bailey's reports, Facebook Gaming Market Monitor, he explains that there are several factors holding back further grown spurts in gaming at Facebook.
The foremost is that users are harder to come by, especially since there is an intense competition for a user’s time from other social networking services. Gaming operators can compensate by spending more on promotion, but the days of viral channels for creating buzz are over. Facebook has muted the viral channels previously used to recruit new gamers, since users were complaining that the gaming operators were nearly spamming them with user-activity streams.
In addition, user expectations for higher-and-higher quality are causing gaming developers to divert more funds into research and development than marketing. Gamers are demanding titles that require more skill, which increases their engagement, but puts further stress on the R&D budgets of developers. Also the move to make Facebook Credits the compulsory payment platform for gamers has diminished revenues to gaming operators.
Ultimately, the basic problem for gaming at Facebook is that it is not perceived as a gaming platform specialist, according to IHS iSuppli, causing hard-core gamers to migrate to platforms that are primarily for gaming.
One bright spot was Facebook's release of a mobile-app software development kit (SDK) that gaming operators will be using in 2012. Facebook estimates that 425 million users access Facebook from a mobile device every month, offering a wide and deep user space for gaming developers.