New York Social Game Makers Go Mobile to Grow in a Post-Zynga World

Online social games started out as popular distractions for the masses on Facebook. But these days how often do you actually play “Mafia Wars”? While some doubts have been raised by industry insiders about the early model for attracting players to social and casual games, a handful of companies in and around New York’s lesser known gaming scene remain bullish about the sector’s potential.

Last week, Zynga (NASDAQ: ZNGA), arguably the biggest dog in this fight, acquired New York-based game developer startup OMGPOP in what may have been a defensive maneuver to absorb a fledgling rival. (Zynga did not immediately respond to requests for comment on the deal.) Meanwhile, Jun Group in New York, a social video ad platform, struck up a partnership on March 19 with casual and social game company in London to use such games for video advertising. These are just some of the latest moves in this niche of the gaming industry that is trying to retain the interest of a fickle audience.

Casual and social games are breezy forms of entertainment typically aimed at the general public rather than more intensive, immersive “core” titles from major game publishers. Zynga, the developer of games including “Mafia Wars” and “Words with Friends,” established itself as an early leader in social games as Facebook grew in popularity.

However, Mitchell Reichgut, Jun Group’s CEO and founder, says changes by Facebook that cut back on rampant status updates whenever players earned rewards in social games have altered the way such games are promoted. “You used to be able to post that you just gained some points [in a game],” he says. “When they changed the rules a lot of that connectivity went away.” Seven-year-old Jun distributes marketing videos for its clients through mobile devices, social networks, and content sites.

Even with fewer status updates on Facebook promoting games such as “FarmVille,” Reichgut remains confident that Zynga and other social game makers can attract attention that advertisers want to tap into. “In the social video space, social games deliver by far the best value” as a platform, he says. “It’s a huge and growing audience. Zynga is not going [away].”

Reichgut’s company, which raised $2.5 million in December from Western Technology Investment, entered a partnership this month to bring video advertising to social games published by In addition to that, Jun also has partnerships with Sacramento-based social game developer KlickNation, which was acquired in December by Electronic Arts.

Social games, Reichgut says, offer advertisers a different way to connect with customers. For example, players can earn more points towards their games by watching promotional videos. “You get a much better result as an advertiser when you don’t interrupt somebody and they opt-in to the program,” he says.

Reichgut believes the social gaming model is evolving fast as social networks change the way people connect and is not in danger of dying off like some fads. “There will be shifts and turns, but that is natural,” he says.

With the formative days of social games in the past, game developers are finding new ways to innovate and compete for the public’s attention. Three-year-old Playmatics in New York, for example, is a developer of original online casual games as well as titles based on popular television shows such as “The Walking Dead” and “Breaking Bad,” on behalf of cable network AMC. Playmatics is primarily bootstrapped, but Margaret Wallace, the company’s CEO and co-founder, also raised $1 million through Swiss angel investors specifically to develop an original title called “Shadow Government.”

Wallace says she is trying different funding methods to support the development of various games. Thus far she has raised some $20,000 via the crowdfunding marketplace toward the development of an iPhone and iPad game based on the 1987 movie “The Untouchables.” Tablets and smartphones, she says, offer game developers a fresh landscape to exploit. “As a gaming platform, especially for the kinds of social and casual games I make, [the tablet] is the perfect device,” she says.

There are no clear-cut winners in the tablet and smartphone gaming sector yet, Wallace says, which creates new latitude to draw in more players of casual and social games. The opportunities in the mobile gaming market, she says, are attracting big players. “That’s why we saw Zynga purchase OMGPOP,” she says.

Indeed, last week’s buyout of OMGPOP, the developer of mobile game “Draw Something,” may give Zynga a beachhead in the mobile games market, according to Wallace. “Zynga recognized that OMGPOP did a pretty awesome job establishing a footprint in the mobile space,” she says—a segment where Zynga had not been as strong. The acquisition also raises the question of whether Zynga removed a potential competitor before it gained more momentum. “A lot of people look at the OMGPOP purchase and wonder if it was a kneejerk reaction,” she says, in response to seeing a tiny startup gaining traction in the mobile game space.

But such moves may be necessary to reach more players on new platforms. Zynga struck early on Facebook by attracting players and their friends to its games with relative ease. “The conditions that created Zynga are so much different from the conditions that prevail today,” Wallace says. Zynga “is expanding into its own destination site and moved into more of a publisher role.” She believes Zynga has the potential to evolve, of course, however the risks and scrutiny are also greater for such a high profile leader in the social games market. “Everybody keeps waiting for the other shoe to drop,” she says.

Wallace is not alone in seeing big changes in the social and casual gaming market. Mattia Romeo, co-founder of game developer and game design consulting company Gigantic Mechanic in New York, started the company with co-founder Gregory Trefry to develop mobile, location-based games. Their iPhone game “Gigaputt,” for example, creates virtual golf courses by using the players’ real-world surroundings as the terrain within the app. Gigantic Mechanic, founded in 2009, is bootstrapped and its co-founders use their game consulting work to support development of their own games.

Trefry and Romeo previously worked as designers on casual games, including “Diner Dash” at now-defunct New York game studio Gamelab, and then wanted to try their hand at a different type of game. Romeo says the booming casual games market started to cannibalize itself, making it harder for independent developers to grow. “There were fewer opportunities, there was lots of cloning, developers got pushed out by these large aggregators,” he says.

Companies such as Big Fish Games in Seattle, which publishes online, mobile, and PC games, offer players a multitude of titles to choose from rather than the cherry-picked games offered by independent developers, Romeo says. He compared the game aggregation model to watching television shows primarily on one network rather than selecting individual shows regardless of which channel they are on. “As people moved more towards that model, it pushed more commoditization of games,” he says.

That commoditization, he says, had a side effect of making it more expensive for developers to create new and original content. “Either you tried to clone [an existing game] on the cheap side or spent a lot of money on resources,” Romeo says. Creating location-based games offered him and Trefry the leeway to develop new titles for an untapped market fairly efficiently. “We saw an opportunity to innovate,” he says. However, he says he does now want to overestimate the prospects of location-based games and assume there will be a flood of adoption the way casual games such as “Angry Birds” or social games such as “FarmVille” did in the past.

Romeo believes his company can still grow in the mobile gaming sector by tapping into the huge popularity of smartphones such as Apple’s iPhone. “Even if we manage to capture 0.1 percent of the audience, that’s still a viable audience,” he says.

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