Social Network Game Popularity Soars, Challenges Loom

By Gabriel Perna: Subscribe to Gabriel's

August 24, 2010 12:01 PM EDT

More and more people are planting virtual crops, killing virtual enemies and playing out both exuberant and mundane virtual lives in social networking games.

A report from research firm NPD Group says 56 million people in the U.S., or 20 percent of the population, have played a social networking game. That is nearly as large as the population of California and New York combined (58 million). If social netowrking gamers were a political party, they would have garnered nearly as many votes as John McCain in the last election (59.9 million).

The report, aptly named "Social Network Gaming," says 35 percent of social network gamers are people who are new to gaming altogether. This means the rest are probably gamers who have started to jump over from traditional console games.

"Although 35 percent of social network gamers are new to gaming, it's clear that a lot of existing gamers have been drawn into the social network gaming arena as well," Anita Frazier, analyst at The NPD Group, said in a statement. "This impacts both the time they spend with other types of gaming, as well as the amount of money they're spending on gaming. As more players are drawn into these games, the entire games industry is going to feel, and have to adjust to, the impact."

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This kind of impact on the rest of the industry has been well noted recently as both console and software sales have taken year-over-year hits. Console sales are down 13 percent compared to 2009 and software sales fell eight percent last quarter year-over-year.

Despite, its growth in popularity, there are challenges that face the social networking gaming industry. For one, revenue could be an issue. In the report, Frazier said only 10 percent of social networking gamers have spent real money playing these games. An additional 11 percent said they intended on spending real money.

The study, which used a nationally representative sample of social network gamers as well as a pre-identified sample of social network gamers, found there were other problems as well.

"While social network gaming has caught on with a mass market audience, it's not without its challenges. Players are frustrated by slow loading and performance issues and report getting bored by the games easily. 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," Frazier said.

This article is copyrighted by International Business Times, the business news leader

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