At the beginning of the year I blogged a bit about games in social networks (here and here), since then the category has gone from strength to strength as measured by app installs and usage – e.g. Playfish had 900 million minutes of usage across its three games in June, up from 300 million minutes in May. To put it into context 900 million minutes is the same as 30 million people watching an episode of EastEnders (for those that don’t know Eastenders is a popular UK soap that screens in 30 minute episodes).
Perhaps unsurprisingly, given the growth in usage and the hype around Slide, we are now seeing some big investments into this sector, with $29m just announced for Zynga and SGN raising $15m back in May. Playfish was also in on the action, albeit in a small way, raising $1m from Accel earlier this month. Thanks for Max to the pointer.
So what does all this mean?
For me it is another example of how innovation cycles are increasingly compressed these days – particularly in sectors that are a derivative of other new successful areas, e.g. social games are a derivative of the successful social network sector.
In this case we have seen the social games sector go from first VC investment back in January (Union Square into Zynga) – a move which at the time seemed risky and visionary, to the big rounds described above barely six months later. Moreover consolidation has already started with Zynga acquiring virtual worlds FB app YoVille.
We are also seeing the traditional games cycle of increasing budgets to improve quality to take market share playing out over the same timeline. This has always been the strategy at Playfish and now SGN are singing from the same hymm sheet. All of this is of course brilliant for Facebook who at their conference yesterday lauded Playfish for their high quality games.
Finally, following in the footsteps of Myspace’s data portability initiatives Facebook announced yesterday that they are extending Facebook Connect making it possible to log into third party sites using Facebook login details and then to access things like friends lists inside those sites. This will help the social gaming startups get closer to their dream of people playing with each other across different socnets.