Fun and Games
Fun and Games

It took radio 38 years to accumulate 50 million users. It took television just 13, and the Internet a scant four.

It took Facebook just one year to reach 200 million users.  The media environment is changing...and fast.

Online social games, like Farmville and Mafia Wars, are the second most popular online activity in the United States, even more popular than email.  Social networking is now number one.  But these aren't separate activities: chances are if you're on a social network, you or your friends are playing games.

Take Facebook, where 40 percent of its 500-million users say they play online games. And all those online gamers are translating into big money.  Hundreds of millions of dollars in virtual products for social gaming will be sold in the United States in 2010.

And that's good news for people like Greg Kihlström, the Chief Creative Officer of the web development firm Carousel30.

"There's games that you can download free for the iPad or iPhone or things like that," says Kihlström, "but once you download them you have to, you know, in order to really unlock the secrets of the game or get new levels or things like that you have to purchase an upgrade."

George Washington University's Dianne Martin calls the online gaming business model "brilliant", because the gaming companies take advantage of a market that already exists.

"Part of their rationale for being on social media is to have this big group of friends," says Prof. Martin.  "So, you've got the friend basis and you simply use that as a platform to then do 'farming' or whatever all these games are that they do."

Greg Kihlström says, aside from being fun, another part of the genius behind a game like Farmville - the number one Facebook game - is that people can spend a short amount of time doing simple tasks, which keeps them interested and challenged.

"They'll come back, they'll, they might be at work, at school, they might be doing all sorts of other things, and they'll come, they'll play for 10 minutes, see the ads on the screen, come back a few minutes later and, you know, they'll see more ads," he says.  "They might click on the ads, they might, you know, do other things, but really it's a symbiotic relationship between the people who make the games and the social networks that they're are hosted on."

With millions of people playing games online, and coming back for more, Dianne Martin says profits for game developers can really stack up.

"It seems that the primary way of monetization is through virtual goods or virtual features.  So, If I want to buy special tools in then I can, I pay money to get special little things to help me in the process of the game."

George Assimakopoulos is the founder of Eyetraffic Media, a firm that helps companies identify their audiences and drive traffic to their websites.  Assimakopoulos says people are starting to recognize the Internet as a distinct media channel - like TV or movies - where they can actually express themselves and join up with like-minded individuals.

In the past, he says, you might sit down, face-to-face, with friends and family to play board games.  Online gaming allows you to interact with people who might be anywhere in the world.   Assimakopoulos says that in online social games can create  viral activity...a naturally expanding social community.

"When you have somebody coming to a friend and saying, 'Hey, you gotta be involved,' it has much more credibility than any kind of outside advertising, because I'll believe a friend before I would any other form of media."

So just how profitable can all these games with friends be?  In Asia, more than seven billion of dollars in virtual items were sold last year alone.

Which means that all those online fun and games aren't likely going away anytime soon.

You can view all of Philip Alexiou's "Money In Motion" web reports by clicking here.