Social games market to earn over $1bn by 2012

Social network-based gaming is rapidly eclipsing traditional casual games, according to a report by analyst Screen Digest.

Earnings last year reached $639 million – almost tenfold that of 2008's $76 million.

Screen Digest this will continue to grow, albeit less dramatically, reaching $1.5 billion by 2014.

The bulk of the revenue comes from microtransactions, with Screen Digest claiming this "overshadows" in-game advertising.

"There is no doubt that the traditional PC casual markets of ‘try and buy’ and subscriptions have come under pressure from the success of games on social networks," said Piers Harding-Rolls, Screen Digest's head of games.

"As users of social networks have increased and the volume of social games content has expanded rapidly, casual games portals have had to work harder to compete."

Unsurprisingly, Farmville developer Zynga leads the pack, and despite the rush of interest from studios and publishers alike is the only company bringing in over $100 million. It also boasts 242 million monthly active users, with its closest rival being Five Minutes at 73 million.

Other leaders in the sector include Playfish, Playdom and SlashKey, who together with Five Minutes and Zynga comprise 56 per cent of the social gaming market.

While the US is the biggest territory and Facebook the biggest platform for social gaming, Screen Digest argues that networks in China, Russia and Japan are surging ahead.

106 million of the 500 million monthly active users of social games worldwide originated from China. "This market is by no means a one network opportunity," claimed Screen Digest.