Games Could Make Facebook Biggest Bank by 2015
April 13, 2011 10:03 PM
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Forty to 50 percent of time spent on Facebook is dedicated to playing games
A successful entrepreneur has predicted that
will be the largest bank by 2015.
Ken Rutkowski, founder and president of Metal International, is an observer of technology and an entrepreneur. Recently, he stated that Facebook would be the biggest bank by 2015 because of Facebook Credits found in games.
Facebook has become a powerhouse in the social networking industry since its launch in 2004. It currently has over 600 million active users, and even had a movie made about its creation called "The Social Network."
In addition to just socializing with friends, Facebook allows its users to connect through playing games like Farmville, which was developed by Zynga. Farmville is undoubtedly Zynga's most popular game with an estimated value of $12 billion.
Facebook will be the largest bank
by 2015," said Rutkowski. "I hear you say 'how can they be a bank, what's going on?' If you play games on Facebook, which, by the way 40 to 50 percent of the time spent on Facebook is playing games, and those games - like Farmville and Mafia Wars - are paid for and you have to buy credits for that and they are called Facebook Credits."
Rutkowski mentioned that "old school" media companies have a market capitalization of $241.7 billion while "new school" media companies are valued at $319.7 billion.
Rutkowski also noted that people who do not have a Facebook profile may want to make one soon because if they don't, a profile will be made for them.
"Why is it important to have a profile?" said Rutkowski. "They are going to start using that to determine what your credit worthiness is. By the way, if you don't have a profile they will make one for you, so it's better for you to create it and manage it than them. That's why you want to be selective with what you put on there. If you have kids that are being idiots online, make sure you stop them right away as they are creating a pretty negative profile long term and it happens often."
In other news, Rutkowski reported that
Apple is now the most profitable retailer
in the world.
"Apple retail stores do $2400 per square meter of floor space compared with Tiffany's which does $700 per square meter per day," said Rutkowski.
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4/14/2011 1:12:39 PM
The problem is, publicly traded companies always seek the biggest market and the largest piece of the pie. It's just the nature of business. Management will do market analysis and conclude if they stay as-is and make traditional games like Konami, they're likely to stay within the $3 billion range. However, they'll look at the social gaming earnings and see growth like Zynga from $4 billion last year to $12 billion this year. With profit potential like that, it would be any business major's DUTY to follow suit.
Even if "quality" games still exists, they will almost certainly be infected by the "buy your progress and stuff" scam that has made Farmville all those billions. People ARE willing to BUY virtual nick nacks and experience levels with cash, and judging by Zynga's meteoric rise (and just about every other social gaming company), obviously its FAR more reaching than just the EQ/2nd Life/WOW crowd. They've successfully got Average Jane/Joe spending $30 a pop just so they won't have to suffer through 10-20 hours working to get the latest cute drawing or get a higher score than their friends.
It's coming. Too easy to see that. Games have been forcing you to earn your bonus items for over a decade already on all the major systems. It's a no brainer to take that out to the next step and charge you directly for it. Even guys like EA are already doing it on the smartphone versions of their games. But this is just the beginning. I doubt anyone out there thought token packs would ever generate this kind of money, but the secret's out now and the whole world will want a piece.
4/14/2011 1:35:09 PM
Taking it a little further out, we all know the cloud is coming as well. With Facebook, Playstation Network, Xbox Live, etc., the framework for the transition to all social gaming is already here. I see gaming for the large part as moving away from the 1-player experience entirely in the future. Even a game like Farmville which is really a single-player game with ZERO interaction between friends, integrates the social element so that even though you're playing by yourself, you have the sense that you're existing in a larger social world by visiting your friend's farms (to see all the loot they got and get jealous) and sending/receiving items from your frieds. What was traditionally a 1-player experience in a closed system is now opened up to observers and competitors. So whether you are competitive and want to outdo your friends' scores or you just like to show off your deco, you have incentive to play other than the torture... ahem gameplay. Future games will certainly have far more real interaction between players. Whatever forms of incentive exist, plunking down cash to gain an advantage in that area, whatever flavor it comes in, seems to be something the largest audience is willing to do. Bait and switch em. Free game! Oh wait, it sucks, is boring, and horrible, but if you SPEND, your experience will get better! All my friends are playing it and having a great time, I just started out and it sucks, I better spend a few bucks so I can be like them.
Ahh, gameplay. The other nail in the coffin I see is that as such a huge potential for profit, this trend will SERIOUSLY dumb down games trying to get this biggest piece of the pie audience. It's happened before in alot of industries, including movies and also games (I'm already not very happy with the current state of the industry, but what I see for the future is just all that much more bleak and very obvious to me as a simple continuation of its course for the last 15 years.)
Yes, I played Farmville about 1.5-2 years ago and played it daily for about 6 months as an exercise to understand Facebook gaming and what the draw was. It became a competition between me and my friend, I logged on every 4 hours to harvest and plant. At least I never spent a DIME on it. I could see from the first day what type of "game" it was. But I'm sad to say I did contribute to the success of Zynga in some way.
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