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With an undisclosed investment in Social Gaming Network by his personal fund, Amazon founder and CEO Jeff Bezos is proving Om right. Back in May, when Bezos invested in Kongregate, another casual gaming site, Om thought it might be the first of many. May is also when SGN raised a $15 million round from Greylock Partners and the Founders Fund.
SGN makes games for social networking sites such as Facebook and MySpace, and has titles that include WarBook and Superlatives. Now that casual gaming has exploded onto the web, the business case isn’t too far-fetched. Revenue comes from ads, selling virtual goods, subscriptions or some mix of those options, with advertising being most prevalent but least effective for casual games.
Gaming has made money, but monetizing social networks is still a struggle, which makes SGN worth watching. Succeeding with advertising depends on getting large numbers of users, which Social Gaming Network — with its 1.1 million daily users — has. It’s facing a Facebook crackdown on spammy applications, which could hinder growth on that site, but is still growing on MySpace and Hi5, which have recently opened up their sites to outside apps. In order to really make money, it needs to push the sale of virtual goods. That might make it the most likely Bezos investment to succeed.