Deal Radar 2008: Playfish

Playfish develops and publishes video games on online social networks. The company focuses on ‘social games’ that can be played together with friends and family, using the infrastructure of sites like Facebook.

Unlike many traditional video or computer games played by one person at a time on a game console or PC, social games like Pet Society, Word Challenge, Bowling Buddies and Who Has the Biggest Brain? are all games developed by Playfish that users can enjoy together.

The company was founded in October 2007 by Kristian Segerstråle, now CEO, Sebastien de Halleux, COO, Sami Lababidi, CTO and Shukri Shammas, CFO. It is based in London and has offices in Beijing, China and Tromsø, Norway. Total funding for Playfish stands at $4 million: $3 million in seed financing from angel investors in March 2008 and $1 million in a second round from Accel Partners in July 2008.

Mashable wrote a couple of months ago that Playfish saw a total of 900 million minutes of usage across its network, up from 300 million in May. This translates to about 30 minutes of playtime per user per day, which is approximately 25% of YouTube’s US monthly engagement.

Over 95% of Playfish’s distribution is viral, through news feeds, profile views, and invitations. Playfish currently uses PayPal to receive payments but expects Facebook to start its own payment system soon, which is whole other can of worms. Playfish is also already a registered iPhone developer, and the company believes that the future of mass market entertainment is on the mobile.

As social games are looking like the next big growth opportunity in the video games industry, many players like MyTopia, Zynga, HitGrab and Social Gaming Network have entered the space. A look at the gaming applications on Facebook shows that most of the top lineup is made up of independent gaming start-ups rather than major names in the gaming industry. It’s becoming clear that the market is changing and leaning more towards smaller, nimbler companies who are able to use the distribution and availability social networking sites offer. According to the NPD Group, the online gaming industry is already a $1 billion industry, with over 11 million gamers from the US.

If kids spend 30 minutes per day on Playfish games, I wonder how much their total gaming time adds up to…so far, though, most of these games are just games. I would like to see the industry evolve towards more edutainment, whereby games also partake in the education of children and youth.

Related Readings:

Web 3.0 and Online Sports
Gen Y and Edutainment
PC Games – Where We’ve Been and Where We’re Going

This segment is a part in the series : Deal Radar 2008