Wednesday, August 22, 2012

Facebook Inc (NASDAQ:FB) Games have a Glimmer of Hope At Last - NASDAQ:ZNGA

Game developers like Zynga Inc (NASDAQ:ZNGA) were ruling the roost with profits being made via in-game purchases and advertising till the model plummeted from its peak, at Wall Street. This model has become redundant because only a few big players are bringing in profits while a major section of players are unwilling to spend.
However, Facebook Inc (NASDAQ:FB) might have provided the perfect solution for game developers via its new feature – in-game subscriptions. Users will be charged a recurring amount for games, which will directly go to the game developers. In return, users will get regular benefits like more in-game currency, advancement in levels faster than other players, or tools to give them a better edge in the game.

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A number of issues can be addressed thanks to this feature:

  • Wall Street will jump for joy because it is easy to evaluate and predict profits from subscription.
  •  If a user is constantly reminded to pay up, there are chances that he will give up playing. A subscription will prevent this from happening. Moreover, if the model is designed properly and it clicks with users, they will be willing to pay up in order to keep playing.
  •  Subscriptions will help to close the gap between different platforms like the Internet and mobile since it will work smoothly across both. Developers don’t need to come up with extra features for monetizing mobile.

The question remains as to which developer will be the first to successfully utilize this feature. The rumors circulating state that it will be Amazon, as it recently introduced its first game for Facebook. Amazon is looking to venture into the world of social gaming in order to expand its San Francisco operations. However, executives from Amazon have not commented on this piece of news yet.

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