In a new report issued by Parks Associates, the firm forecasts that the social gaming industry will increase it’s revenue by five times between 2010 and 2015. The revenue increase is fueled primarily by increased advertising revenues and virtual goods sales. According to Parks Associates, these driving factors have already pushed social gaming revenues north of $1 Billion in 2010, and they see the trend continuing. The research firm will be presenting the findings of their Social Gaming: Market Updates report at the upcoming Game Investment Conference in Austin, TX on the 13th of April.
“Gaming on social networks has quickly become the most visible category of online games,” said Pietro Macchiarella, Research Analyst, Parks Associates in a statement. “Right now more than 250 million people play games like Zynga’s CityVille and FarmVille on Facebook every month, and both game developers and marketers have taken notice. Big brands such as McDonald’s and 7-Eleven have carried out cross-promotions with existing social games.”
Macchiarella also points to improved user monetization is a factor contributing to the industry’s success. He notes that early entrants to the field missed key monetization and revenue opportunities, but rapid advancements in gameplay has allowed for more effective incentives for users to purchase virtual items. Examples include virtual tractors and seed, items that improve or enhance gameplay, as well as rare items (swords, shields, etc.) to build status.
“The most powerful asset of social game developers is the quantity of behavioral data that they can obtain from their games,” Macchiarella said. “The abilities to measure the efficacy of different gameplay mechanisms, to tweak game design in near-real time, and to test new models are advantages that traditional gaming companies will never have. Zynga’s huge market share is the best proof of the competitive advantage made possible by properly leveraging consumer data.”
Parks Associates’ report also addresses the 500-pound Gorilla in the room: In Game Advertising. The once “Holy Grail” that was to save the gaming industry has all but disappeared, or rather, highly evolved since it’s inception. A shift in focus towards branded games, sponsored items, communities, and “advertainment” options that are far better suited to their end goal, and have come around to enhancing the gamers’ experience rather than interrupt. Parks Associates points to this new model as further revenue opportunities for games makers.
As mentioned above, Macchiarella will present the firms findings during the Social Games session on Wednesday April 13th, at the Game Investment Conference. The session is slated to provide a detailed overview of the social gaming space, and looks at market drivers and inhibitors, competitive analysis, market dynamics, and an investigation of current monetization and payment methods.
TrialPay conducted a 
That’s not to say that Eastern European developers haven’t been acutely aware of what’s been happening in the Western European, North American, and Asian markets, and they now want in on a piece of the action on these more popular Eastern European platforms. The Russian social games market alone has taken off at a juggernaut’s pace, growing from $0 in 2008 to a valuation of over $30 million in 2009. Most social gaming in Russian takes place on the countries’ leading social network 
The survey found that the most popular method of monetizing Flash games is still rooted in in-game advertising. The majority (58 percent) of respondents indicated that they use in-game advertising as their primary monetization method, with sponsorships taking second place at 43 percent. Licensing held down third place with 26 percent, and web site ads landed in forth with 20 percent. Monetization via microtransactions scored dead last in developers methods, garnering only 6 percent.
Reporting RMB 2,878.4 or roughly $421.3 million in total revenues for Q2 2009, ending June 30th, Tencent saw a 14.9 percent increase over the previous quarter, and a sizable 79.9 percent increase in revenues year-over-year. This now brings the company’s first half of 2009 revenues to $787.9 million, a 77.5 percent increase over the first half of 2008.
Q1 2009 saw a total of $69.1 million invested, again, down from Q4 2008’s $100.7 million. Certainly one factor in this downward trend must be attributed to the global economic downturn. Looking at the overall venture capital investment landscape, this downturn may simply be a reflection of the general decline in vc cash. Technology related industries have seen a particular decline, and virtual goods investments certainly fall into this category. Virtual Goods News’ sister site, Virtual Worlds News is also reporting record lows in venture capital investments. Again, remain calm, and exit the building in an orderly fashion. Oh no, wait. That’s not right. This might not be the most favorable news to come out of the virtual items sales industry, when seen from 30,000 feet up, our swimmers seem right in line with everyone else in the pool. The real question here is – when we start seeing the return to ‘business as usual’, will virtual goods/worlds investments also see this return?
In celebration of their upcoming 4th birthday, 
