Will Gaming Companies Break Into The Next Frontier?

Over the last 10 years, we have witnessed a change occur in nearly every other technological service. Little though has happened in the gaming industry, especially in online gaming. In fact some companies are yet to embrace the aspect of online gaming due to the challenge of monetization. However, a few have shown interest and in the process some have paid the price for that. For instance, Zynga (NASDAQ:ZNGA) and Caesars Entertainment (NASDAQ:CZR) have struggled in recent years due to slowdown in income.
Specifically, the case of Zynga is incomparable to any other because the company solely relies on online social gaming. Surprisingly, Zynga is one of the few companies that seem to understand the future of gaming.
Social gaming is the next frontier in the gaming industry and at the moment Electronic Arts (NASDAQ:EA) and Zynga along with a few others seem to be pursuing this new market with intent. Other companies like Sweden-based Net Entertainment are also in pursuit with slots like the Wonkywabbits game and Starburst slots among others.
Nonetheless, the overall case scenario at the moment is that gaming companies are making more money from non-social games, which begs the question on whether they will be putting more money in developing top class social games.
Since Zynga’s Farmville, King Digital’s (NASDAQ:KING) Candy Crush Saga, and Rovio Entertainment’s Angry Birds, there has been hardly another social gaming Franchise that can claim to have hit the scales in the recent past.
This is probably due to the manner in which both Zynga and King Digital have failed to deliver in terms of revenues in recent quarters. Companies are now caught up in two minds on whether to pursue this interesting market and risk compromising on income, or limit investing in the market and risk trailing others by the time someone finally finds the magic that could help monetize social gaming. A part of the problem for gaming social gaming companies has been due to the shift to mobile platforms with many people now playing the various social games via mobile.

In comparison to other industries, we have witnessed companies like Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) along with many others struggle with mobile monetization. However, over the last few quarters these companies have begun turning things around.
For instance, Mobile ads now generate a significant chunk of Facebook’s ad revenue. In fact, Mobile revenue is expected to dwarf Facebook’s desktop revenue by 2016 with a rate of 75% Mobile and 25% desktop.
Therefore, gaming companies can heed the patience demonstrated by counterparts and focus on developing quality social gaming franchises in readiness for the future. This can help them build a strong base by the time the mobile gaming begins to generate significant profits.