Social Network Gaming Upending Industry - InformationWeek
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8/24/2010
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Social Network Gaming Upending Industry

More Americans are playing social media-based games, but spending on other games has dropped 20%, finds NPD Group.




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One in five people ages six and older have played games on social networks in the last three months, while also spending less on gaming overall, a research firm says.

Fully, 56.8 million Americans have played social network games during the last 90 days, a significant number for a relatively new gaming activity, NPD Group reported Monday. Of that number, 35% are new to gaming, having never participated in any other type of gaming before joining social networks.

Females and older age groups are more likely to be new gamers than other groups measured in the study. Overall, however, social network gamers are fairly evenly divided between genders, 47% male and 53% female.

The significance of the report is the impact social network games are having on the time spent on other types of games and the amount of money spent on gaming overall.

"As more players are drawn into these (social network) games, the entire games industry is going to feel, and have to adjust to, the impact," NPD analyst Anita Frazier said in a statement.

One in 10 social network gamers have spent money playing these games and 11% say they are likely to make future purchases. At the same time, social network gamers overall reported spending 20% less on other games since they started playing on social networks.

The long-term impact on social network games to the overall industry is not yet clear. In looking at the video game industry in July, NPD found that sales of hardware, software, and accessories dipped 1% from the same month a year ago to $846.5 million. The drop marked the 10th monthly decline in the last 13 months.

However, if social network gaming is to play a bigger part in the overall gaming industry, developers will have to overcome some obstacles.

"Players are frustrated by slow loading and performance issues and report getting bored by the games easily," Frazier said. "Clearly, these types of games will have to continue to evolve if they hope to hold their audiences and incentivize them to spend money playing."

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