Game developer: Social games will crash and burn


7 Apr 2011
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Denis Dyack, a longtime developer and founder of game studio Silicon Knights, doesn't see a healthy future for social gaming.
"It is damaging traditional gaming for sure it's going to work out is anyone's guess," Dyack said in an interview with Industry Gamers published yesterday. "The trend that I see is it's probably going to be one of the biggest bubbles and explosions that our industry's seen in a long time and I think when it crashes it's going to crash very hard."
Dyack told the gaming publication that social titles look to be more "like marketing to me" than "real gaming." And over time, he thinks that the business models surrounding social games just aren't sustainable.
Even so, it's hard to argue with the popularity of social games, like FarmVille and CityVille. Those titles have 44.5 million and 88.9 million monthly active users, respectively. And they have helped Zynga, their developer, become the biggest threat to traditional gaming companies, including Electronic Arts and Activision Blizzard.
Zynga is doing so well, in fact, that earlier this year, reports were swirling that it had secured $500 million in funding from Morgan Stanley, Fidelity Investments, and other major investors. At the time, the company's valuation was estimated at $10 billion, easily besting Electronic Arts' current $7.6 billion valuation and trailing just behind Activision Blizzard's $13.7 billion market cap.
Even so, few traditional developers, which create titles for PCs, game consoles, and portable devices, have been quick to jump on the social bandwagon. Only Electronic Arts has doubled down on social gaming with the acquisition of PlayFish in 2009. Other than that, as Dyack points out, developers have done little more than "experimenting" to see whether social games make sense from a business standpoint.
Of course, Dyack might have a reason to be down on social games. His development house, Silicon Knights--which is based in Canada near Niagara Falls--develops console games. In the past, the organization has developed Dark Legions, Gex, Eternal Darkness: Sanity's Requiem, and Metal Gear Solid: The Twin Snakes. His studio is currently working on X-Men: Destiny. It has no plans to enter the social market.
That potential bias aside, Dyack has been working in the game business for a long time--his studio was founded in 1992--and he has seen several ideas and technologies come and go. It should be interesting to see what happens with his predictions and how they ultimately affect his company.
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