Interesting debate... and let me give a slight twist by playing the devil's advocate here... :-)
Let us say you have restricted social sites and have removed all games, and now you are hoping people will start working more. Why? Were they playing games because they didn't want to work (in which case they should not be in the organization in the first place) or because they had nothing else to do (as Dinesh rightly said, not engaged or motivated enough to self-learn or enhance their existing skills)? In either case, the problem source is the organization (HR & management) included and not really the employee... :-)
From another perspective again, let us say you have restricted social sites and have removed all games, and now you are hoping people will start working more. Why? I could be doing the same things on my mobile today. So instead of using your computers openly to play games, I now use my mobile to do so, and now you don't have a single record of what I'm doing. So here is my question to you... What would you prefer, that I do something openly and transparent or would you prefer that I do something on the sly and keep you off the radar... :-)
I don't think restriction is actually working. It used to when mobile technology was not advanced enough but no longer. Dinesh has actually hit the nail... Engagement and Motivation. Those and only those are the two solutions that can help the situation to improve and help in productivity. All others only stop an activity but have no effect on improvement.
I also have a different kind of suggestion.
Remove the restrictions totally. On a daily basis, send a report to every employee on how he spent his 8 hours (which site he visited and for how long). Start by sending this report to individual employees. Be polite in the email. Don't reprimand or comment. Just FYI kind of message. After a gap of 1 week, start sending a consolidated report of every employee to the entire team. Let the data be public. From the 3rd week, start using a multi-color highlighter on employees spending an unusually long time on these sites.
Please note... at no point in time are you reprimanding any employees for this. Just FYI. In the 4th week, have their managers keep this report on his desktop when reviewing team performance... :-) He is not to refer to the report, just look at it when one of his team has not completed their task as desired... :-) You will be surprised at how much all these activities reduce automatically when you do this... lol. Try it and then tell me if it worked...
Cheers,
Navneet Chandra