Facebook Watch Out: Google Gaming the Social System

August 12, 2010 - Written By Maddi Hausmann Sojourner

Google’s got game.

Their ThinkGaming conference was held without much fanfare, but Lazard Capital Markets’ Colin Sebastian sees a focus on social gaming as “a strategic necessity.”  The analyst said in a research note that Facebook was “the elephant in the room.”

“Games could help drive Android, Chrome and Google Checkout adoption,” he said. “With games quickly emerging as key applications for social networks and mobile App Stores, we expect Google to leverage its increasing share in the mobile market to expand and aggregate casual and social games.

Google acquired Slide for $182 million last week, and plans to acquire Jambool and their in-game e-currency product Social Gold.  The new Google game play is at a cost of $70 to $75 million Needless to say, Social Gold competes directly with Facebook Credits.  There have already been reports of Google’s moves toward social gaming, including investing hundreds of millions in Zynga as well as other on-line gaming developers.  Google’s venture capital division also invested in game developer Ngmoco, which is interesting because Ngmoco develops games for the iPhone platform (and not anywhere else thus far).

Google announced in May that it would be launching Google Chrome Webstore, a desktop analogue of Android Market or Apple’s App Store.  Games would be a central feature of this growth strategy, as online “casual gaming” is now an $800 million market according to Sebastian.  Google could use their Google Checkout in their Chrome Web Store and encourage game sales by making it easier for users to discover and recommend them.  Google Checkout is already in use on the Android platform; by opening it up to browser-based games, Checkout could be more of a competitor to PayPal.

Chrome will continue to support Adobe Flash, but HTML5 technology will be emphasized, and Google is working on an open source PC and console emulator called Native Client, allowing better browser graphics.

Sebastian points out that not only is Google’s foray into social gaming taking on Facebook (where he says users spend 40 percent of their time gaming), but also Microsoft’s Bing, which recently launched free online games as well.

Google has yet to make an announcement about their plans for social gaming.  Eric Schmidt, Google’s CEO, is on record as saying “the world doesn’t need a copy of the same thing” when asked if their plans were to offer similar services to Facebook’s.

Source:  MediaPost