UPDATED 14:31 EDT / AUGUST 31 2012

NEWS

Developers Worry “It’s Expensive To Do Business With Facebook,” Jump Ship to Mobile Games

The community of developers is being scared away by the high cost of putting their games on Facebook. According to a statement posted in Los Angeles Times, Facebook gets 30% shares from game developers and 20% is dedicated for high marketing costs. This clearly snatched 50% revenue for developers.

“Facebook is still a viable platform for independent developers looking to make money on a game,” said Mitch Lasky, a venture investor at Benchmark Capital who specializes in game companies. “However, companies with aspirations to be larger publishers – Kabam, Kixeye, even Zynga – are moving aggressively off the Facebook platform to mobile and the open Web. Publishers aren’t convinced that the costs of being on Facebook are worth it.”

Every single day, I would receive notifications from friends asking for energy, coins, help and other resources to fund and support them in whatever Facebook games they are addicted to. There are tons of users out there who willingly shed money to beef up their characters and level up. Keeping the site fresh through gaming and other apps help Facebook increase engagement—an element that does not only drives revenues, but is perhaps the soul of any social networking sites.

The exodus of developers poses a big problem to the world’s largest social networking site. While at the pinnacle of them all, Facebook has to keep their over 900 million members and engaged all the time. We know see how Twitter is giving them a run for their money. But, gaming is giving them an edge against other social networks. Zynga, whose success is largely attributed to Facebook, is already shifting to the mobile space as the latter’s users are dwindling down. Their profits plummeted big time with the viral Farmville dying.  Meaning, should developers completely turn their backs on Facebook, it will be disastrous for Zuckerberg’s team in many aspects, especially with financials. A mobile gaming nirvana is a not-so-good scenario for the social network.

Just recently, Facebook updated their gaming policy to “focus engineering resources where social games have the highest impact and drive the best user experience.”  The changes are also geared towards phasing out credits to real money sooner or later.

Despite the fact that Facebook is still a good place to put their games money-wise, developers are now starting to venture heavily in Apple iOS and Google Androis game development, where business can be more lucrative and profits are better. Gaming also is a fast rising star in SmartTVs.


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