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Can Asia Take the Lead in the Next Generation of Social Games?

About the Author: Sangeet Paul Choudary writes regularly on strategies for online markets, and works closely with startups in these spaces in India, Singapore, and the US. You can follow him on Twitter. A version of this article was previously posted on Sangeet’s blog, platformed.info. Zynga’s (NASDAQ:ZNGA) recent reversal of fortunes brought up several questions about the social gaming and virtual goods model. The company’s growth is so closely linked to Facebook (NASQAQ:FB) that it is often indistinguishable which of the two was riding on the other’s growth. In any case, Zynga was the first application to leverage Facebook as a marketing platform at such a large scale and with such success. In doing so, it also heralded a wave of social gaming that shook traditional gaming companies into rethinking their offerings. Piggybacking on another network

Zynga and Facebook, not best friends anymore
Zynga’s growth strategy was piggybacking on Facebook’s growth. Networked businesses often ride the success of another network. Paypal rode eBay’s growth and YouTube was helped by MySpace’s growth early on. The key driver for success in piggybacking on another network’s growth is the ability of the overlying network to add value to users of the underlying network. Paypal provided eBay users a method for instant payment. Youtube provided Myspace (and later Facebook) users a way to easily share videos.