Those without established brands are 'in a increasingly precarious position'
The founder of Social studio Playfish believes the Facebook games platform is no longer a fertile ground for start-ups.
Kristian Segerstrale, whose London-based company has benefited immensely from the Facebook games revolution since 2007, says games on the social network are now over the hill.
"It’s more than plateaued, I think it’s declined a little bit,” Segerstrale said, before claiming that Facebook’s own initiatives have helped decelerate growth on the platform.
“[But Facebook has] gone from nothing to 200 million active players in two-and-a-half years. The fact that they’re dampening it down a little bit is neither here nor there.”
Facebook earlier in the year clamped down on the viral opportunities for games on its platform. Developers could no longer push game status updates on other people’s Facebook home-page feeds.
This moved turned what is already a hugely competitive space into one where the benefits of word-of-mouth began to diminish.
It meant that advertising was more crucial, analysts say, and as such risk was heightened.
“Perhaps the immediate effect of Facebook curbing some of these channels is to see the aggregate number of clicks going down a little bit,” Segerstrale continued, in an interview with CNBC Business.
“The era when Facebook provided the opportunity to grow enormously is over,” he added.
“The winner overall – the company that’s going to be remembered for forging this market – will be the one that creates a truly inspirational product for social interaction, competition, cooperation and exchange across a lot of platforms.”
Segerstrale believes that the social game space “has yet seen the Super Mario or the Halo” of its platform.
“We’ve barely scratched the surface of what’s possible,” he added.
A year ago Playfish was purchased by EA in a deal worth $400 million.
The studio, which is said has 50 million monthly active players, is working on various EA-owned franchises such as FIFA Superstars.
Segerstrale warns that others should follow in the same route to survive the competition.
“Companies without franchises will be in an increasingly precarious position,” he said.
“If on the one hand you have Harry Potter and on the other you have ‘The Wizard Adventure’, consumers will choose the one they recognise.”
Playfish has nearly 300 employees in studios across London, San Francisco, Beijing and Tromso in Norway.