Size Does Matter- OpenSocial vs. Facebook
While at Electronic Arts, it was common to participate in hallway executive debates over the support of one gaming platform over another. Be it Sony, Microsoft or Nintendo, choosing the correct fledgling platform during a market transition could make or break a company’s numbers. While technical capability was always a part of the conversation, the bottom line was trying to predict which platform would be most likely to deliver the largest base of potential customers. With hundreds of millions of dollars in R&D and development expense on the line, choosing one’s platform medicine correctly could either jumpstart, or short circuit, individual career paths.
Even with state-of-the-art research and decades of market experience, accomplished companies like EA have seen prescient predictions quickly go awry. While EA’s bet on the Sega Genesis in the 80’s ultimately catapulted it to 800-pound gorilla status, it recently whiffed on the unprecedented trajectory of Nintendo’s Wii.
We see a similar battle raging in the social networking arena between Facebook and those tethered to the OpenSocial initiative including MySpace, and most recently, Yahoo. Ultimately, the battle will be won or lost on hard economics. Whereas Facebook currently has a stable development environment, OpenSocial is just now gaining traction with MySpace’s firm commitment to the initiative. With 200 million users soon to be enveloped by OpenSocial, Facebook’s formerly massive platform is beginning to look a bit less, how does one say, massive. It would be like Nintendo and Microsoft getting together and saying to the gaming community, “We’re going to create a common ‘build once, write twice’ coding environment for game developers forming, in the process, a platform that would dwarf the market for Sony PlayStation 3. The result would be a compelling argument to design exclusively for that conjoined platform and block ‘exclusives’ from appearing only on PlayStation. MySpace and others are looking to trump Facebook’s social application opportunity by embracing a third party API strategy.
So while Facebook’s audience is still large enough to substantiate an allocation out of most widget development budgets, the risks of doing so as a primary distribution strategy are about to go through the roof. The risk for Facebook in having the smaller audience is that developers will build first on OpenSocial and secondly on Facebook. The result will be a shattering of Facebook’s current social app monopoly. It will also result in the loss of prestige Facebook now enjoys from having what amounts to short term exclusive ‘rights’ to social applications.
It is our hope that having a wider swath of networks across which to amortize development expense will create higher quality applications than currently exist on Facebook. Perhaps we will see the end of mindless zombie playing, sheep throwing, juvenile applications that currently dominate the Facebook experience and open up opportunities for more resourceful uses of the platform. It has become increasingly self evident to us that this juvenile environment wears thin with an adult population very quickly. Kids do not want to hang out socially with adults nor do adults want to socialize with kids. To this point, Facebook has failed to prove that it can provide a social context for generations to co-exist peaceably and we believe this is largely a failure of their application development strategy.
Furthermore, the environment and context in places like Facebook and MySpace are repellent to lifestyle and luxury branding companies who are looking for a more controlled experience reflective of their own brand values. Hugo Boss doesn’t want to associate with juvenile activities, nor do they want to be squeezed between a Proactive ad and one for Monster.com. Hugo Boss wants to appear next to Armani, Mercedes and W Hotel. OpenSocial will provide more adult contexts better suited to the tastes of more demanding brands.
It is our hope that OpenSocial will provide the context and resource to enable a more rich and engaging interactive experience for adults. One that truly leverages the energy and passion of groups to impact their social environment in a manner that benefits both themselves individually as well as the wider community of which they are a part.
In the end, we believe that it is only a matter of time before Facebook joins the OpenSocial initiative. The writing is on the wall. They don’t feel the pressure cooker now, but the fire under the kettle has officially been set ablaze.
