This post was written by Mike Su, Vice President of Games at dude-centric video network Break Media, where he created the social gaming group.

So there was this guy named Ken who was working a 9-to-5 at some giant software company writing tons of code for something whose importance and value was exceeded only by its monotony. Ken&'s wife, Roberta, had been playing some newfangled PC game and thought to herself, &''Man, this game sucks! Ken and I should totally make a better one!&'' The husband-and-wife team then worked nights and weekends for three months building a game. The final product Mystery House. And it was awesome.

On the heels of this success, they raised money, made more hit games, and eventually sold their gaming empire for $1.5 billion. For those of you who aren&'t familiar with this story, it could just as well be the founding story of a Playfish or a Zynga today. But this is the storya4a4or my version of ita4a4of the founding of Sierra Online back in the &'80s.

It was an exciting time back then. Technology had enabled game developers to develop new game mechanics and immerse players in new worlds in ways that had never been imagined before. And the best part A husband-and-wife team could work nights and weekends and knock out a meaningful and entertaining game in three months.

Past is prologue

It&'s an exciting time now as well, with the rise of the social game. David Maestri built the OG mafia game Mob Wars on top of his day job (a point that was disputed by his employer, but that&'s another story). And CrowdStar still doesna4a4t have the need for any venture funding. In fact, we read every day about new games that add more users in a few hours than the entire population of Guam.

Yet in the same way that a husband-and-wife team can no longer build a competitive PC game in three months, we&'re entering a time when it will no longer be possible for a few guys in a garage to build a successful social game. Many of the most successful games in the market today were built on the backs of the free viral marketing channels Facebook provided. But Facebook has clamped down on that in recent months, in response to users who were tired of reading about one of their friends finding yet another lonely pink cow. For social game developers, the free ride is over, and success in the social game market will come down to two things: the ability to build audiences for your games, and the ability to develop genuinely compelling games.

If a tree falls in a forest&8230'

On the first count, I think therea4a4s an interesting parallel to the way the online video industry evolved. In the early days of online video, there were a few breakout hits from content creators who were smart enough and fast enough to get in on the wave early. These folks, like the Diet Coke and Mentos guys, LonelyGirl15, and others, were among the first to deliver compelling content on a highly viral platform (i.e., YouTube and its embeddable player). Soon the gold rush was on, and the market became flooded with content.

Eventually, content creators who were late to the party could break through only by coming to terms with the fact that it was no longer enough to simply create a funny video a4a4 you either needed built-in reach, or a marketing strategy that included SEO, SEM, and various other online user-acquisition techniques, to make a mark in the industry. Those who failed to do so were stuck with great content and 500 views.

Likewise, the gaming industry is now entering a phase where just making a fun game is not enough. Game developers now must devote significant resources toward building audiences for their games, and the user-acquisitions guys on most teams are going to be just as important as the game designers.

And just as we see bigger and bigger budgets for marketing PC and console games these days, I expect bigger and bigger budgets will need to be set aside to market social games. The only a4Afreea4 user acquisition will be for those who already have a significant distribution footprint (i.e. the big guys like Zynga, or a distribution company like 6 Waves).

Yes, the game still matters

When it comes to the importance of gameplay, in the first generation of social games, we witnessed huge success with games being built by people with traditional web developer backgrounds. This is because what made a game attractive and go viral took a lot of the same muscles that make websites successful. These were people who cut their teeth on figuring out landing pages, conversion funnels, A/B testing, and so on. All these elements took games that were pretty basic from a gameplay standpoint and turned them into runaway hits.

The success of the next generation of games, as Zynga demonstrated with Frontierville, will depend less on the a4Ahustlea4 of virality and more on real and impactful gameplay. High-concept games will tend to be easier to market and therefore, will perform better as an advertisement, resulting in lower user acquisition costs. In short, the a4Aarta4 of the game will matter more, and as a result I think wea4a4ll see social gaming companies reach out more and more to the traditional gaming community to find talent.

So, with all this in mind, who will the new games come from I believe it will be a mix of the successful incumbents who have built-in distribution (Zynga, Disney/Playdom, Crowdstar), startups that have enough funding to market games as well as develop them, likely with a veteran team (A Bit Lucky, Funzio), or companies with existing businesses and audiences that are entering the field (media companies like Sony, Fox, Sugar Inc, or yours truly a4a4 Break Media). And the games that come from these companies should continue to become more sophisticated and more fun to play. The days of Ken and Roberta coding in their spare time are once again coming to an end.

CrunchBase InformationZyngaPlayfishCrowdStarBreakMediaInformation provided by CrunchBase
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