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Beyond Facebook — Free White Paper

A Look At Local Social Networks in Europe and Latin America

The social gaming market is maturing. In addition to a top-heavy marketplace, where big firms dominate and claim the bulk of revenues, the overall space is also increasingly crowded. This forces companies to spend more on marketing, which in turn shrinks the margins between acquisition cost and average revenue per user.

One strategy to espace this predicament is looking for other markets that are less mature. And so, in collaboration with our friends at Viximo, we wrote a study on the non-Facebook side of social gaming titled: Beyond Facebook — A Look At Local Social Networks in Europe and Latin America.

Does this mean that we believe Facebook is in trouble? No, of course not. We just believe that looking beyond a single platform will serve social game publishers with a global strategy well. So in this study we took a look at social networks like Hyves (the Netherlands), Tuenti (Spain), VKontakte (Russia), StudiVZ (Germany), Yonja (Turkey), Orkut (Brazil) and QuePasa (Mexico).

We also forecasted several markets we believe will prove important to the growth of the overall industry: Netherlands, Spain, Turkey, Germany, Brazil and Russia.

 Key Findings

  • Social Gaming market will continue to grow, reaching $8.6 billion in worldwide revenues by 2014E.
  • Non-Facebook social gaming represents the bulk of revenues, growing from $3.2 billion in 2011 to $5.6 billion by 2014E. Even excluding Asia non-Facebook platforms will total close to 25% of worldwide social gaming revenues.
  • Region-specific social networks present significant, incremental distribution with strong monetization and lower customer acquisition costs.
  • Key markets for social game developers are Brazil, Germany, Russia and Turkey.

Methodology

Social games operate using a so-called ‘free-to-play’ (F2P) revenue model, in which users are generally not required to spend any money until they reach a certain level in the game. For this report we pulled and analyzed 774,158 unique transactions by 152,159 individuals in the six-month period ending on June 1, 2011. We used this data to calculate the average revenue per paying user, or ARPPU, by dividing revenues by total number of paying users. Using this key performance indicator allows us to compare social game spending in different countries. Revenues include both direct payment (e.g. credit cards, mobile, prepaid game cards) and indirect payment from players using opt-in marketing incentive offers (e.g. offer providers).

Feedback

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Index

Introduction & Motivation
Methodology
Current Landscape
Beyond Facebook
Market Size & Forecast

  • Figure 1: Worldwide Social Gaming Market 2010 – 2014E
  • Figure 1a: Worldwide Non-Facebook Social Gaming excluding Asia 2010 – 2014E Figure 2: Worldwide Social Gaming Revenues by Geography (2011)
  • Figure 3: Total Number of Social Gamers in Selected Markets (MM) 2009 – 2015E
  • Figure 4: Total Social Gaming Revenue in Selected Markets (mil $) 2009 – 2015E

Social Networks: Europe

  • Figure 5: Overview of Social Networks in Selected European Markets 2011

Leading Social Networks in Europe

  • Hyves
  • Tuenti
  • VKontakte
  • StudiVZ
  • Yonja

Social Networks: Latin America

  • Figure 6: Overview of Social Networks in Latin America
  • Orkut
  • Quepasa

Appendix

  • Table 1: Worldwide Social Gaming Market 2010 – 2015E
  • Table 2: Social Gaming Audience & Forecast for Selected Markets
  • Table 3: Social Gaming Revenue & Forecast for Selected Markets

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