Google, Facebook, in Social Gaming Throwdown

(Reuters) – Facebook is not the only game in town anymore.

The world’s largest Internet social network moved on Thursday to shore up support with game developers such as Zynga, who provide one of Facebook’s biggest draws, on the same day that Google Inc introduced games on its recently-launched social network.

With the two Web giants competing to attract users to their respective online services, the dueling social gaming announcements underscored what could emerge as a key battleground between the two companies.

“It turns out that people like to play games, and its core to the social networking use case,” said Jeremy Liew, a partner at venture capital firm Lightspeed Venture Partners. Liew, who has invested in social game companies including Playdom, which was acquired by the Walt Disney Co last year, was commenting on Google’s games announcement.

On Thursday, Google said it would offer 16 games from third party developers on Google+, including Zynga Poker and the popular Angry Birds game. Google, which previously made an unspecified investment in Zynga, said it will roll out games gradually on Google+, and will make the game feature available to everyone “soon.”

Facebook, which is hosting 100 game developers at an event at its Palo Alto. California headquarters on Thursday evening, announced a handful of new features to improve the gaming experience on its website, as well as a new policy loosening restrictions on how developers can market their games on the social network.

The changes will expand the types of notifications that Facebook users see when their friends are playing games on the website, rolling back restrictions made last year that provoked grumbles among some game developers.

Social games, such as Zynga’s Farmville, are some of the most popular activities on Facebook. More than 200 million users play games on Facebook every month, and the company takes a 30 percent cut of the sale of virtual goods that are bought by users as part of the game experience.

“Our games ecosystem has continued to grow. But there’s no question that we want to grow it faster in a more high quality way for our users and developers,” Facebook head of games Sean Ryan told Reuters in an interview.

Google launched its social networking site in June, signing up more than 10 million users in the first two weeks.

Google’s move to offer games on its social network provides game developers with a compelling alternative to Facebook, said Lightspeed’s Liew.

But he said the most important consideration for game makers is which social network has the most users.

“Right now no one is going to be willing to give up Facebook because it’s where the users are Today. Google+ got a terrific start but it’s got a ways to go,” he said.

Among the new gaming features introduced by Facebook on Thursday are the ability to expand the size of the window in which games are played on Facebook’s site, new ways for users to create bookmarks for their favorite games and a scrolling “ticker” that highlights the games a person’s friends are playing, their recent scores and achievements.

In loosening restrictions on game updates within Facebook’s general newsfeed, the company must walk a fine line between helping developers promote their games on the network and irking users that are not avid gamers.

Facebook’s newsfeed – which displays a rolling stream of messages, photos and updates from friends – is a vital distribution channel for gamemakers, allowing companies like Zynga, Electronic Arts Inc’s Playfish and Playdom to reach vast numbers of users. But is has caused some backlash among Facebook’s non-gaming users, who found the constant notifications about their friends progress within various games to be irrelevant and annoying.

Last year, Facebook clamped down on the practice, so that Facebook users would receive notifications only about games which they had also installed. Under the new policy, Facebook users will see notifications about any game their friends are playing.

But Ryan said the company had developed special algorithms that will only display updates if Facebook has a reason to believe they are relevant to the person. If the person shows no interest in certain types of games, Facebook won’t serve them updates in the newsfeed.

“No one wants to go back to the bad old days of people being very unhappy about gaming because they feel like they’re being spammed all the time,” said Ryan.

“That’s the key which we really spent months and months working on, is that tricky balance of trying to expose a lot more games to people, but only to the people who we think want to play those games.”

(Reporting by Alexei Oreskovic. Editing by Andre Grenon, Robert MacMillan and Carol Bishopric)