Good news: European companies are in second and third places in social gaming on Facebook. Bad news: Zynga is first.
Both Wooga, based in Berlin, and King.com, based in London, are now slugging it out for second and third places, according to AppData, a service that measures the popularity of mobile apps and developers.
Riccardo Zacconi, CEO of King.com, says that while Wooga had already pushed EA into second place, King has stolen a lead on them both this week in the measure of daily active users (DAU) playing social games on Facebook.
Nor is this a case of the newcomers on the block beating some old-timer that doesn’t get it. While EA may be traditionally associated with games consoles—a totally different kind of gaming that appeals to a completely different kind of player (young adult males rather than older adult females)—remember that it bought its way into social gaming with the purchase of the London-based Playfish for $400 million in 2009, and of PopCap Games, the maker of Bejeweled and Plants Vs. Zombies, of Seattle for $1.3 billion last summer.
But—and it is a very big but —before popping the champagne corks, let’s not get too self-congratulatory. Anyone remember War Admiral? Or perhaps more recently, Richard Thompson? No? War Admiral was runner-up to Seabiscuit in the 1938 “match race of the century” at the Pimlico Race Course in Baltimore, and Mr. Thompson was the unfortunate silver medal to Usain Bolt’s iconic 2008 Beijing 100-meter gold run. No one remembers runners up.
So while these two European companies slug it out for second place, the behemoth that is the U.S.-based, publicly quoted Zynga Inc. utterly dwarfs them. According to AppData, King.com has 10.26 million daily active users; Wooga 10.17 million DAUs; and EA 9.07 million DAUs. But Zynga (65.14 million DAUs) is twice as big as the next three games makers combined.
But hang on, says Mr. Zacconi, we are comparing apples and oranges. “If you look at the actual social games that Zynga has —not, for example, poker games—then its lead is cut.”
He is right, but that still leaves Zynga way out in front, and still bigger than the next three combined. Both Mr. Zacconi and Jens Begemann, CEO of Wooga, point to one reason for Zynga’s dominance. “Zynga was there when social gaming really started to take off and were able to get that essential first foot in the door,” said Mr. Begemann. “That early start has been the key for them.”
Neither CEO said passing Zynga was a target for them. “I am not focused on passing Zynga,” said Mr. Zacconi. “My target is to build a company that is leading in casual and social games, making sure that every game we launch is the best game we can have in it is genre, and focus on revenue and profits.”
But according to Nicholas Lovell, CEO of the acclaimed Gamesbrief, a respected newsletter that covers the games industry, to focus on who is winning on Facebook is to look in the wrong place. “The Facebook battle has been won by Zynga,” he said. “Mobile is the battleground of the future.”
“No one is saying, ‘Guys if we don’t have a Facebook strategy we are dead.’ They are saying ‘if we don’t have a mobile strategy we are dead.’”
But he is keen to stress he is not writing off Facebook and its 845 million users; simply that the world’s largest social network has matured and as such it will attract different, and perhaps less exciting, companies.
“It is not to say that Facebook is not a viable platform for making real revenues and profits. But it is that the race to build a must-have, 10-times return, gaming business on a new and exciting platform, well if you were writing the business plan for that game business, Facebook might not even appear in it.”
And for companies looking to build a long-term future, the Zynga model—get big, quick and then look to exit on the public markets—may be a game plan to emulate.
It is a strategy not lost on Mr. Zacconi. King.com has certainly made no secret of that an IPO is a consideration and while Mr. Zacconi is keen to stress that nothing has been decided, he has put in place the changes needed should he decide to go that way. By way of an aside, he did say that his preferred market was not in Europe—it’s NASDAQ.
None of the players in this battle are blind to the changes. Zynga acquired OMGPOP, makers of the viral (and mobile) game Draw Something; Wooga launched Diamond Dash last year for iOS last year, and King.com is to launch its first mobile game, Bubble Saga, next week, first on Amazon’s Kindle Fire tablet, and then on both iOS and Android two weeks later.
With the growth of mobile, and at the moment the lack of any clear champion, the gaming space has been thrown open once again. If European companies can repeat their belated success in social gaming in this new arena, then the race is on.
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