With Zynga’s less-than-stellar IPO last fall (going from $10.00 to $9.50 on opening day and down to $9.00 the next), people are seriously considering the lasting value of Facebook games.  Zynga reported stable (rather than growing) DAU in the last few quarters, despite launching a number of successful games (including Castleville and Empires & Allies), suggesting they are predominantly shifting users from one game to another.  This lack of investor confidence seems to be truly just in Facebook games; Japanese social gaming company Nexon was considered to have a very successful IPO this past December, earning $1.2 billion early on.  So what’s wrong with Facebook?

It has a severe lack of innovation, with no sign things can get better.  Even from competing companies like Disney’s Playdom or EA’s Playfish, most games continue to be simple “customize a space or character” types of systems, with little actual game-play involved.  When these first launched, they were an exciting leap forward in graphics, engagement, and character on the platform, but progress seems to have stagnated in the last 18 months on Facebook, despite mobile and freemium web-based games continuing to advance.

So can Facebook games evolve beyond this?  Facebook is first and foremost a narcissistic platform, where people show off who they know and what they have been doing: not a gaming platform.  The games that have been most successful thus far reflect that: send the most expensive gifts, create the best looking pet, or manage the most profitable city or home.  But this history of “games” (or lackthereof) has convinced most hard-core gamers that the platform is a waste of time, damning any new game before it starts.  Even if a more in-depth story-driven game were able to get a foothold, the very method through which games spread on Facebook encourages developers to interrupt game play with viral prompts: “You leveled up! Share this?” or “You found extra grapes! Send them to friends?”  For many hardcore gamers who prefer to be immersed in the experience, this is a jarring experience and seriously upsets the flow of the game.  Once shaken from the experience, they aren’t likely to dive back in.

Developers are, thankfully, still working to change these expectations; I recently met the founder of FableLabs (previously Tribal Crossing) who is working to push the genre forwarded, creating story-driven Facebook games with a beginning, middle, and end.  Analytics show most Facebook games tend to have an active lifespan of 3 – 6 months before their active DAU noticeably drops.  So why not design games that have a 3 – 6 month story arc, argues founder Thomas Wu, and that simply direct users to a knew gaming experience when completed?  I truly hope FableLabs and similar endeavors are able to grow on and mature the Facebook gaming platform, but I doubt they’ll be able to attract the players they’ll need.

Think I’m missing a major piece of the puzzle? Leave a comment or message me on twitter @webwallflower.