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Sports makes a play for social gaming

You've probably seen a friend's activity in one of the popular social games, such as FarmVille or Mafia Wars, tucked in amongst the endless stream of your Facebook news feed.

Perhaps you've been sent an invitation to play from a friend or family member.

Or maybe you're one of the hundreds of millions playing them on Facebook or your smart phone.

Whatever your engagement level with social games, one thing is clear: They're proving to be a revenue generator that can keep a brand top of mind in the social media world.

And in a time where teams, athletes and leagues are starting to grasp how to turn their large online followings into another revenue stream, social gaming has begun to trickle into the sports social media landscape.

"From a business standpoint, it's an industry that's really caught fire in the last couple years," said AJ Vaynerchuk, co-founder of VaynerMedia, a brand-consulting company that works with the New York Jets and New Jersey Nets, among other sports properties. "As these platforms grow and reach maturity, obviously there's going to be more users that are interested in [playing social games]."

So what exactly is a social game?

Well, as the name would suggest, it adds a social layer onto the entertainment. They often encourage users to get friends and connections involved. In FarmVille, users plants crops and tend to them. Users can invite friends to be their virtual neighbors, giving access to each other's farms and the ability to give each other gifts.

They're also able to buy livestock or trees to add to their farm -- so-called virtual goods -- which is where the revenue comes in.

Often, virtual goods in the games are purchased with real money via Facebook credits, and Facebook gets 30 percent of the revenue from purchased credits. So the developer and Facebook see revenue off social gaming.

And it's big business.

The Washington Post reported in August that analysts predict $835 million in virtual goods transactions this year -- certainly not a number to be ignored.

DeNA, a mobile and social game developer based in China, reportedly has a billion-dollar revenue run rate this year, and is currently working on expanding in the U.S. market, according to Forbes.

Zynga, the company that developed the aforementioned FarmVille and Mafia Wars, was valued at $5 billion in April.

In the sports social gaming landscape, EA has developed Madden NFL Superstars, which boasts over a million monthly active users, and FIFA Superstars, which has 3.8 million. There are also fantasy sports social games.

But on Sept. 8, the Jets, in conjunction with game developer Arkadium, released a social game on Facebook called Ultimate Fan -- which is believed to be a first from a team or league.

"The big picture idea was to migrate the competitiveness of these actual games in the Facebook world and accomplish a few things," said Matt Higgins, the executive vice president of the Jets. "Increase fan engagement, draw new fans to interact with us on a daily basis, and in so doing, create a new revenue stream.

"If we can keep fans engaged constantly in a virtual environment, that just strengthens the relationship between us and our fans. That's our No. 1 goal."

Ultimate Fan begins with users choosing their favorite NFL team, and then pits them against the team that's next on the schedule in a game of "Boost" -- which is essentially a fan poll. By engaging other social connections to join in, your team can win out as having the most fans or "Boost" heading into the real-world matchup.

Users can also make predictions for the week's games.

Additionally, users can set up a custom virtual tailgate for their team, and virtual goods exist for purchase.

So far, so good.

At publishing time, the app boasts an impressive 250,980 monthly active users, and Higgins said it will continue to evolve.

"It's a constant evolution," said Higgins. "2.0, 3.0, 4.0 happens in a news cycle. It's an endless dialogue about how to improve it. It started out as virtual goods, but [on Sept. 23] we allowed the ability to comment -- you can talk trash about the other teams. To do that it's five Facebook credits, which in the real world is 50 cents. That's doing great already."

Higgins added that in a couple of weeks, the ability to annihilate another team's tailgate will be available, adding another layer of social entertainment.

By having all NFL teams available in the game, it allows for other organizations to become involved and get in on the revenue. The Dolphins have joined on with Ultimate Fan since its launch earlier this month, and Higgins said the Jets have discussed it with a number of other teams.

"We built it so it's scalable," Higgins said. "Any team can sign on."

The Jets aren't alone.

In a blog post earlier this month, Dallas Mavericks owner Mark Cuban put out a call to developers saying he wanted to invest in social games. In a subsequent interview with Forbes, Cuban let it be known he wanted all his businesses to have their own game, and said he wants a game for the Mavericks that is compelling enough to turn those not familiar with the team into fans.

ESPN has also stepped into the social gaming world. On Monday, ESPN Arcade launched ESPNU College Town in conjunction with Playdom, a game development company acquired by Disney earlier this year. The game, based on Playdom's City of Wonder, will allow users to build and run their own virtual campus and compete head-to-head against friends with fictitious athlete sports cards.

Facebook also announced in a press conference on Sept. 21 that it is revamping its attention to social games.

In the spring, the company largely cut down on social-game user activity from hitting friends' news feeds. For the many millions of social gaming users on the platform, millions of others not playing found such information to be overbearing and annoying.

Now, the company has returned to allowing such information to be published, but only to friends and connections also playing the game.

Friends who aren't playing the game will get a discovery update in their news feeds, which simply lists that a friend, or a group of friends, have started playing a social game -- not that they've purchased a virtual good or completed other actions inside such a game.

"Hundreds of millions of people like playing games on Facebook … but hundreds of millions of people hate playing games on Facebook," CEO Mark Zuckerberg said at the press conference, according to Forbes.com. "Games are this interesting duality."

Games also now have a prominent spot on a user's sidebar, and at the press conference, the company announced a new organizational structure. The company now features a team dedicated to social gaming, which will work closely with the credits team.

For game developers and brands, this is good news. The more their social games hit news feeds, the more chance they have to grow and create revenue.

But Facebook, which said more than 200 million of its users engage in social gaming, also benefits from this.

"I think that Facebook absolutely knows that one of the most popular, if not the most popular, things that people do on their platform is play games," said Jessica Rovello, president of Arkadium. "It also happens to be a huge, huge revenue driver for them. A lot of the game companies are the ones who are buying their ads within Facebook, and now with the introduction of Facebook credits and Facebook taking 30 percent … that's where they're anticipating making a large amount of revenue. It seems like a no-brainer that they'd have a whole division that is dedicated to games since it's such a huge part of their business model at this point."

Ryan Corazza is a freelance writer and Web designer based in Chicago.