Social gaming is the fastest growing sector of the video gaming industry right now, having grown from essentially nothing a few years ago to what is a multi-billion dollar industry worldwide. The Ayzenberg Group is seeking to highlight this vital sector at the [a]list summit 2012 San Francisco, highlighted by a keynote from the Michael Pachter. We caught up with the Managing Director of Equity Research at Wedbush Securities and discussed his general thoughts on social games on the eve of his keynote.

[a]list: Which do you think will have to change more — the AAA gaming industry to how social games are being made or vice versa?

Michael Pachter: I think social gaming models will continue to evolve far more than AAA models. The key drawback to social games is that they are free, and I think ad-supported models will be developed to ensure that there is monetization of all people playing. I don’t see AAA having to “adapt”, per se, as I don’t see social games as a threat to AAA games.

Michael Pachter

[a]list: Do you think console holders will have to become more like social gaming in certain ways? (Sony is already dipping its toe into free-to-play and has a social gaming platform in Home already).

Michael Pachter: If console manufacturers want to participate in the market expansion we’re seeing on the social side, they will dip their toes in. It appears to me that Nintendo is completely unconcerned, Microsoft more interested in $10 – 15 downloads, and only Sony experimenting with free-to-play. I don’t think any of them see social gaming as a threat, and it largely is additive to the console experience. However, a portion of the console market is casual (think Wii Fit), and social games has cannibalized that segment.

[a]list: Has your opinion on the social gaming industry altered as time as gone on, and if yes then how so?

Michael Pachter: Yes, I take it more seriously now. I initially thought it was a very small market and thought the games were silly. Zynga is showing me that the games are actually games, are quite addictive and fun, and I can see how it will grow into a big business.

[a]list: Some people think that the social gaming industry is a bubble ready to burst. Do you think there’s going to be a regression, or something less drastic like a change in the way such games are developed and virally marketed on platforms like Facebook?

Michael Pachter: I don’t think it’s a bubble at all. To the contrary, I think the late adopters of Facebook are the sweet spot that social games targets. I do think there is opportunity to monetize better, and am interested in hearing what Jeff Karp has to say about this.

[a]list: Could you give us a small preview of what you’re hoping to talk about during your the [a]list summit 2012: The Consumer Courtship keynote?

Michael Pachter: My keynote is really focused on defining the market. It’s entitled “The Casino is Open”, and I will draw an analogy between interactive games and casino games. I plan to expose the audience to my views of how the industry is evolving, and am hopeful one or more of them will make better decisions as a result. My media appearances are nothing more than marketing. *laughs*

[a]list: Ha ha ha, thanks Michael.

_ _

Looking forward to the [a]list summit 2012? San Francisco Join the discussion on Facebook.