Frank Cifaldi, Tom Curtis, Mike Rose, Eric Caoili, Kris Graft
After several years of incredible growth, Facebook's gaming market could be slowing down, according to a new study from analyst firm IHS.
The report studied recent trends on the major social network, and found that the number of users playing games has stagnated over the last several months, and that increased competition has made it much more difficult for developers to attract and engage new users.
Looking specifically at the platform's growth, IHS found that the number of users playing games on Facebook increased dramatically during 2009 and 2010, but that plateaued in 2011. The report did not provide hard numbers, but said that Facebook as a whole saw continued growth during 2011, while the number of users playing games "changed little."
To put things into perspective, the report said that the percentage of users playing games on Facebook dropped to 25 percent in 2011, down from 50 percent at the end of 2010.
The firm specifically noted that even the platform's biggest game companies have seen lagging performance. The FarmVille giant Zynga, for instance, dropped to 225 million monthly active users by the end of its fourth quarter in 2011, down from 266 million users just one quarter prior.
IHS said with this slowing growth, Facebook developers will need to be more cautious in the months ahead. In particular, the firm noted that acquiring new users has become much more difficult thanks to increasing costs and competition, so developers will need to find new and more efficient ways to attract users to their games.
In addition, Facebook users have begun to trend away from simple, accessible games, and instead have turned to titles that demand more skill or commitment. IHS suggested that developers focus on games that better encourage long-term engagement from their audiences.
So THAT's the reason Zynga went IPO! AHA!
You just can't trust a company run by a guy that scams people.