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Social gaming: The parlor-game crowd logs on

No geek credentials required for the low-tech, community-oriented games that draw Facebook fans.

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Andrew Sheppard, the chief product officer at Kabam Games, acknowledges that social games don't have the same complexity as console games – and that they may not immerse the gamer in exactly the same way. But he points out that social games are uniquely capable of bringing people together. For one, there's a low barrier of entry – you don't have to be a veteran gamer to enjoy a social game. Furthermore, because social-gaming titles work inside Facebook, there's a raucously collaborative element to the gameplay experience. Mr. Sheppard points to the Kabam title Kingdoms of Camelot, a game that Inside Networks says attracts more than 6 million monthly users.

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"We regularly hear about [Kingdoms of Camelot] gamers meeting up on weekends to celebrate their in-game victories," Sheppard says. "The friendships these people have are a direct result of the experiences they shared inside the game."

Some aspects of social gaming, of course, remain controversial. Social-game creators, from PopCap to Kabam, get their revenue from a variety of sources, including in-game advertising, promotion for existing for-pay titles, and so-called "microtranscations" – upgrades or premium objects that users must pay hard, nonvirtual currency to obtain. In Kingdoms of Camelot, for instance, a user can choose to purchase packets of in-game "gems," for costs ranging from $5 to $500. This premium content is no way intrinsic to the game – a user can get along perfectly well without a big bag of gems. And in fact, most do. (NPD Group says only 10 percent of gamers spend real money playing social titles; 11 percent indicated that they would be willing to do so in the future.)

Still, most industry insiders expect the social-gaming market to continue to expand, despite the hiccups. Colin Sebastian, an analyst at investment firm Lazard Capital, said in an interview that he expects to see "more opportunity for social gaming, particularly since people seem to be gravitating towards games as a means to interact with their friends and acquaintances on Facebook and other platforms." Mr. Sebastian is not alone: Investment bank ThinkEquity has estimated that in-game advertisements and virtual good sales will together bring a revenue stream of $2 billion by 2012.

Chris Carvalho, the chief operating officer at Kabam, predicts that in coming years, "hard-core" console gamers will continue to migrate to social-gaming titles on Facebook – and the studios will continue to produce. "We believe there is a huge opportunity to create real games, games that bring popular mechanics from traditional games to social gamers and drive deeper, more lasting engagement," Mr. Carvalho says. "To borrow a line from Wayne Gretzky, we don't want to skate to where the industry is, but to skate to where the industry is going – towards more robust gaming experiences."

Who's playing social games

41.1 million – the number of minutes users spent on Facebook in August.

56.8 million – the number of American users who have played a social-media game on a platform such as Facebook in the past three months.

35 – the percentage of those 56.8 million users who had never played a video game before trying out a social-gaming title.

$183 million – the amount of money Google reportedly paid for the social-media company Slide.

$563 million – the amount of money Disney reportedly paid for the social-gaming company Playdom.

$2 billion – the amount of revenue that social games could generate by 2012.

– Matthew Shaer

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