Ada Chen’s Weblog

Mochi Media Acquired by Shanda Games for $80 Million

Posted in Games by Ada Chen on 13 January 2010

Last night my company Mochi Media announced our acquisition by Shanda Games for $80 million. I am THRILLED about the deal and am really honored to be part of this experience.

It’s been nearly 3 years since I joined Mochi Media, and it was one of the easiest decisions for me to make. I practically begged Jameson to sign me up and move out there. At the time, I was leaving Microsoft and headed to SF with my now-fiance Sachin Rekhi. Throughout my search, I ended up speaking with over 20 companies including Jameson thanks to my brother Andrew Chen. Mochi was a stand-out company even as only a handful of people on a couple of IKEA desks :)

As founders, Jameson and Bob are both genuine, passionate people who are truly building their business because they believe in the opportunity and love the games space. It’s rare to find people as authentic and committed as they are, and it really shows in the quality of team and company they have put together.

Congrats to the whole team and thank you to everyone who has helped us get to where we are today!

Facebook and RockYou on Performance Marketing for Social Media

Posted in Advertising by Ada Chen on 31 October 2009

I attended 80/20 Conference, an interesting performance marketing event earlier this week put on by Jay Weintraub. Lots of interesting content there besides this, but posting my quick notes below on a session called “Sustainable Monetization of Social Media Inventory” from Facebook and RockYou.

Speakers
Sarah Smith, Online Sales Operations, Facebook
Mihir Shah, VP Ad Network, RockYou

RockYou

  • 15 billions ads & 200 million uniques served each month. 60% of social media traffic.
  • A third of their revenus is based on performance marketing
  • The challenges of monetizing the Facebook platform is that there’s a high number of impressions per user
  • RockYou differentaites by compliance with Facebook ad guidelines, which protects publishers and delivers better ROI
  • They consider campaigns to be structured in three parts: 1) start the campaign; 2) server-based optimization based on pub & geo targeting and creative testing; and 3) targeting based on creative, age/gender and impression testing.
  • They find that advanced targeting works well for small campaigns but can be difficult to work at scale.
  • Despite the common impression, some direct response advertisers are actually finding performance marketing on social networks to be good at paying out. Netflix is one of these, and many game installs are similar.

Facebook

  • The conversation for marketers begins with authenticity. People’s activities are tied with their unique identity.

FB has 300 million users:

  • 13-17 – 41 million
  • 18-24 – 93 million
  • 25-34 – 87.3 million
  • 35+ – 84.6 million and fastest growing segment

FB tips for advertisers:

  • promo codes perform quite well, and asking questions within ads
  • Rotating ad creatives is important, even if it’s just color. Ad creative decays quickly from user fatigue and saturation.

GDC Austin: MMO and Virtual World Monetization

Posted in Games by Ada Chen on 16 September 2009

An MMOs and Virtual Worlds Panel at PlaySpan’s Monetization 2.0 Forum had some great data points. I did some scribbling and typed up my notes below so forgive any inaccuracies.

photo.jpg

The panel was moderated by EA’s Nanea Reeves with panelists:

  • Jim Crowley l CEO, Turbine
  • Cary Rosenzweig l CEO, IMVU
  • Johny Mang l EA- Dice
  • Tom Hale | Chief Product Officer, Linden Labs/ Second Life
  • John Bates | Entropia
  • Joshua Hong | K2 Network

Linden

  • Second Life makes close to $100 million and not less than $80 million. They make money in three ways: 1) sale of currency, 2) premium subscription and 3) a hosting model where users pay them to allow their 3D objects to persist
  • Linden tracks engagement (user hours), transaction value, % paying, repeat usage, $50 MM user value is exchanged each month.
  • More focused on retention instead of acquisition, looking at users over 2 year lifetimes.
  • Fraud is definitely an issue especially when $$ can come out of the system. Just a cost of doing business.
  • Top merchant at Second Life is making $1 million/year selling sweaters/skirts

IMVU

  • 80% of revenues are from consumers (micro-transactions and user-generated content) and 20% from advertising
  • The essence of monetization is building a service that customers will pay for. You have to be massive to be viable with an advertising model.
  • In Asia (in general, not IMVU) 5-10% range of free to paid conversion % is the common stat
  • Free users add value to the paid users, larger and engaging community
  • IMVU is like Ebay, with 2.5 million items and 20,000 developers creating them. Entrepreneurs creating and selling for others and IMVU is the neutral party since they aren’t creating the goods directly
  • Top 10 creators on IMVU each made over $100k annual revenue
  • Paid items are long tail, top 10 items are only = 0.2% of sales. Users want to be different.

Turbine

  • Turbine recently transferred from subscription to a hybrid subscription & micro-transactions model. Hybrid model offers greater flexibility and choice.
  • Subscription only models leave out the audience that are willing to pay less and don’t capture those that are willing to pay more, so they’ve moved to optional subscription.
  • Since announcing their service they’ve actually seen subscriptions go up and concurrency rates rise too.

K2

  • 100% of K2 revenues are from item sales
  • MMOs: “ARPU is high, relationships is long and persistence is everything”
  • K2’s focus is being very involved with community management
  • Item sales mean that countries such as Turkey, Brazil, the Eastern bloc are full of opportunities for free to play.
  • Free to play is nothing but a pricing option
  • K2 uses traditional resellers of prepaid card codes to reach emerging markets like Turkey, China, Eastern Europe

EA

  • Battlefield: Heroes sells mostly decorative items but launched Boost packs and this item immediately went to the top of the list
  • They also have a RTS with boost items and found conversion rates are much higher
  • Items that have usefulness in the game tend to convert better
  • EA is targeting a 7-8% conversion rate for free to play games, but expects that to lower to 5% with social network traffic

9/18 EDIT: Added photo and Joshua Hong of K2 to the speakers list (thanks Clay!)

PAX 2009: What is an ‘Indie Game’? Panel

Posted in Games by Ada Chen on 16 September 2009

I’ve cleaned up a quick version of a transcript at the ‘What is an “Indie Game” Panel’ at PAX over the weekend. As these things go, it’s probably only about 80% complete so please excuse any omissions in the content. Enjoy!

PAX 2009: What is an ‘Indie Game’? Panel

Panel Description:

The rise in game platforms and distribution mechanisms has elevated the cultural profile of indie games. But along with this increased attention is an increasing debate about how to break through in the market. What really makes an indie title? Is it the game’s budget, art style, community outreach, or their distribution mechanism that really makes indies soar? This panel will examine the success stories within the indie gaming community to begin to expand and educate developers and gamers about this in-demand space.

Panelists include:

  • N’Gai Croal [Moderator] – (Consultant, Writer, Columnist, Hit Detection LLC)
  • Boyd Multerer (XNA General Manager, Microsoft)
  • Simon Carless (Chairman, Independent Games Festival)
  • Derek Yu (Editor-In-Chief, The Independent Gaming Source)
  • James Silva (President, Ska Studios)
  • Mitzi McGilvray (Executive Producer, TikGames)

NC (Moderator): What defines an indie game?

SC: Have an indie, execute on it, and that’s indie.

JS: Indie games are defined by no budget. have to figure out how to do stuff without a budget.

DY: When the idea of indie game became real, the main concept is that anyone can and should make a game. Now it’s distilled to intent & priority. What is your intent when you’re making a game and what are your priorities? That changes depending on a number of factors including budget. When your budget goes up the intent and priority of your game design changes. When team size gets bigger, the intent and priority changes. It’s not necessarily how much money and how big your team is but something changes when those things increase. I would love to see indie developers that have budgets as long as it’s tied to them and not a company.

BM: When you put money into creating a great experience, you start thinking about things like risk management. Independent games are about innovation and fun. Lower budgets free you to take risks that you wouldn’t find in other places and would otherwise not exist.

MG: Independent means that you’re not beholden to shareholders and purely profit driven

NC (Moderator): When you talk about engineers loving games and games responding to the market, should indie developers be responding to the market?

MG: Not necessarily, it’s important that developers pay attention to it. Primarily you do it because you love it, and you have to look at what it takes to be successful in the market. If you see that there’s a lot of competition in a game genre, don’t focus on being independent, build what people want.

JS: I just make games that I like to play. No budget forces you to be more creative. Bigger companies just invest more to make bigger, better more bad-ass games. To make a sequel to my game without a budget, you have to be more creative and think laterally.

NC (Moderator): Is independence defined by walking away from other people’s desires and do something for yourself. There’s a service aspect to it where you’re creating what people want. How do you separate what your fans want to do and what you want to do?

JS: I just do what I want to do. I’m not going to change, sorry.

SC: As far as being more or less indie, intention and attitude are different. Are you making a game in a pure, apart way? Are you making a game because you really care about games? The best indie games from the last few years like Katamari come from this.

NC (Moderator): Derek, can you expand on the idea of intention and priorities?

DY: The intention and priorities change when you get bigger and you get more mainstream. One of the big changes is making the kind of game you want versus making a game which satisfies a certain number of people. Accessibility is a concept which gets more priority once you get bigger and leave the “indie core”. A great example is a game Dwarf Fortress, which is one of the most inaccessible games I’ve ever played. Probably one of the most complex simulations out there. One half of a game you control a dwarf fortress. Very text based ascii graphics. His priorities and intentions are different from any mainstream company that has to make a living and a ton of money out of a huge investment.

NC (Moderator): Boyd, why rename Microsoft community games to indie games?

BM: The intentions are the same, we want to enable people to come in and make games. What you have to get are really good games and fun games. Focus on the fun part. There are people who are going to make a living off of it, and you need to make a fair representation to them that you’re going to get some good quality stuff and some more experimental games that won’t appeal to people. This will speak better to the type of games that we’ll see in the system.

NC (Moderator): While anyone could make a game that would go up on the indie games channel, it’s unlikely that everyone would.

BM: It’s not the easiest thing to do, there’s a lot of room in the industry to make it more approachable and allow people to write their own games. Even if you know how to write the code, the artwork is not super easy either.

NC (Moderator): In reference to kodu, do you think there’s a distinction between amateur side and commercial side? is there a further difference in pro and amateur indie games?

JS: You can’t really tell how much resources have been put into it. The one thing that would help with division is a difference between apps and games section.

BM: I see a division, but as long as it’s clearly defined it’s fine, the pro and the amateur division. I don’t care who makes it. I just want to help people find the better content. the user rating system is really important.

NC (Moderator): Simon, how do you choose what to cover?

SC: It’s interesting, it’s been running for a while. Most of the content is free and it’s mainly flash and freeware stuff. There’s quite a few flavors of indie developers out there. The word indie is being overused right now. Anyone who is not a major publisher is calling themselves indie. They have good methods for filtering the good stuff. It’s so easy to make games nowadays and there’s millions of them. How do you know what to play? TIGsource, user ratings, indiegames highlight the good stuff. The selection for them is a bigger problem than making games for games. the problem is how to make sure people see them.

NC (Moderator): Do you think micro-transactions will help indie games?

MM: Hopefully one of those days that will a feature

NC (Moderator): Derek, what do you think of add-in sales?

DY: If an independent developer finds an interesting way to sell their game and keep on going, I’m not one way or another. As long as the motives are pure.

NC (Moderator): Do you believe indie games is overused?

DY: It runs the risk. People are going to latch on to it and run with it. It’s not necessarily a bad thing. The people for that the label is genuinely important and whom it means something to and to whom the recognition is important, those people should work hard to define it for themselves by the kind of work that they do.

SC: We’ll step in if someone is egregiously not indie. But otherwise it’s a label that people associate themselves with. For example, Pixel Junk Eden was a bit of a controversy. They are based in japan and 30 people. In terms of intentionality, it was self-funded, completely on the side, and it was published on the side. Some people had a problem with the fact that the guy worked on the original starfox and have been in the industry for quite a long time.

NC (Moderator): What would you want to see more of to see indie games thrive?

MM: It would be awesome if there were more ways to help fund and find ways for more people to get started on indie games. Micro-financing for games to help encourage people to publish their games.

BM: For independent games and to raise the overall awareness, I want to see a couple more hits come out of it. I’m still waiting for the game that comes through and everyone wants to play it. When everyone knows about the space, there’s money there, there’s audience there, it’s a virtuous cycle and you’ll see more games.

DY: More hits would be fine but I’d like to see more people making games and getting involved in communities. The big surprise for me out of the whole indie scene is that the people who are involved are so tightly knit. Everyone loves what they do. I would like to see more indie games. Games are a great way to deliver educational topics and to get people to learn things without them getting to know it.

This is a re-post of an article I wrote last week on MochiLand. Original post linked here.

PAX 2009: A Strategic Approach to Game Design

Posted in Games by Ada Chen on 16 September 2009

Geoffrey Zatkin, president and COO of Electronic Entertainment Design and Research (EEDAR), gave an interesting talk about what strategic questions developers should ask themselves before diving into game development. While I don’t believe that this is 100% relevant to the Flash games market, it did raise some interesting questions for me on how smaller indie devs can look for market data in planning their games. It may not be to this level, but it’s a great framework to think about what questions you could ask! I’d love to hear anyone who has thoughts on this.

A Strategic Approach to Game Design

Zatkin defines strategic game design as focusing on the WHAT and the WHY, all in advance of the tactical execution side where you focus on HOW you implement and build the game. What and why are all about the big picture and why you’re making the game in the first place, and is strongly based on the purpose and atmosphere of the game and planning for any anticipated problems. He makes the argument that many teams during production lose sight of the strategic vision, reverting to tactical decision making.

He started off by asking about your planned goals as a developer, such as whether or not you’re building a commercial or independent game. Are you hired to do it or trying to make $$? If your goal is to ship a game, then your goal is really making a game that will sell well. You can take that one step further and ask where you’re planning to have it sell, because that has implications that can incur cost afterward. If you’re launching in Asia, gamers must be able to play with one hand so that they can drink/smoke with the other. In Germany, you can’t build a game with red blood but you can have green blood. Overall, there are a lot of considerations to explore early because it’s expensive to adjust this later.

“The most common reason why games suck is lack of resources or money and then re-working and re-engineering it,” Zatkin said to the crowd. To him, it’s about planning the core of the game and setting a clear vision that can be communicated to everyone in charge of building it. Decide what you’re making early on and disseminate it to your team so that they are surprised as little as possible. “Write it down, use lots of adjectives, make a lot of references to other games,” he urged.

Gathering Data

  • Sales and sales projections
  • Sales from comparable games
  • Check your hardware and see if gamers can actually play it
  • Who are your competitors? What’s their launch schedule?
  • Look at your feature set

Zatkin presented a bunch of interesting data/graphs as an example. I snapped a few photos from his presentation, please don’t mind people’s hair/shoulders getting in the way.

PAX 2009

This graph indicates that the first three months of a console game represents the bulk of sales for the game title. There’s a little bump comes from the holiday wave. The big problem is that games don’t have a secondary distribution channel (e.g., movies can go on dvd, tv, airplanes) so for big-budget and even mid-budget games, you should be careful.

PAX 2009

This is a boxplot graph of racing genre games – light blue is 25%, dark blue is mid 50%, bottom blue is bottom 25%. The average revenue price is misleading, since the high performance games drag the average up to 110k but the median is 65k. In general, 25% sold 18k units or less and devs get 20-30% of box sale prices.

PAX 2009

This was Zatkin’s example of a competitive matrix with a listing of features. Creating these can be helpful for competitive information and to understand what your audience expects. Also, market size can defer dramatically based off of a couple big factors (e.g., teen shooters and adult shooters).

Zatkin makes the point that developers need to be thinking about data like this. While everyone can make a game, making a game that does well requires forethought about how to get the game out and sell and market it. From the game design standpoint, he says that you need a strong leader in the group that pushes a clear vision along.

Pax 2009

In the console world, Zatkin’s data indicates that game quality is a strong indicator of game sales. Realistically, since all games are compared relative to other games, not every game is going to get a 8/10 or higher. Looking at groupings of game reviews and sales. getting a 90+ game sells three times on average. Looking at 5,267 games across consoles. game reviewers have a strong correlation to the gaming audience. In short, quality really does make a difference.

Making a Game

  • Fun - It’s important not to lose sight of making a game fun. Fun is a nebulous concept and contextual. However, while it’s hard to make a game fun there are some very concrete things that will keep a game from being fun. Keep those not-fun elements out of control so that the fun elements can shine through.
  • PAX 2009

  • Priorities - No team has ever gotten everything they want into a game, you have to prioritize. Discipline in making a list of what you want pays off because it helps you prioritize and place new features onto the list and show what will drop off. This helps make sure you have time to focus on finding the “fun” level.
  • Feedback - start getting feedback early on m1 or m2, especially if you’re an indie developer. Getting feedback early is important to make sure you’re building the right thing. Consumers vote with their dollars.
  • Marketing - integrate with your promotional group. As a game developer, find out early what your marketing and promotion group needs and when. Is it a demo for GDC and a separate demo for PAX? Knowing these things early helps you plan for knowing when the engine is in a good enough state. This also avoids the classic developer and marketing clash. While many developer teams think that if they have a great team, the game will sell by itself. However, data seems to indicate otherwise.
  • PAX 2009

This graph was interesting – these compare game sales between games which release: demo & trailer, demo only, trailer only, no demo or trailer. The vast irony is that some games just aren’t very fun once you actually play them.

This is a re-post of an article I wrote last week on MochiLand. Original post linked here.

PAX 2009: Designing Indie Games With a Team of One

Posted in Games by Ada Chen on 16 September 2009

I spent the past weekend at Penny Arcade Expo in Seattle. It was a fantastic, packed event and definitely felt more like a gamer convention than a developer convention. The gamer enthusiasm ran the gamut from complex D&D games featuring 20-sided dice, card games like Magic, to XBLA games and hardcore console games. This year, PAX was huge with an estimated count of 75,000 attendees.

Designing indie games with a team of one

One of the most interesting talks I attended was “Designing indie games with a team of one” given by Michael Todd, the creator of several cool games and most recently a neat RTS game with a distinctive visual style called Broken Brothers. You can visit his site to check out his games at www.spyeart.com.

bbshot2

The biggest point in Todd’s talk was the idea that a one-person indie developer should focus on making games that take short periods of time. In specific, he advocates that developers focus on creating short, 7-day games to flex their muscles and get better at game design and development. He says, “Try not to make games that take years, there are lots of penalties to doing it alone and more advantages.” He goes on to outline the advantages and disadvantages of the one-person development team.

Todd started off by describing his first game project, which was an 8-month standard game that cost him $5,000 to publish. The budget for his game was spent on an artist and marketing, but discovered that it is truly difficult to stay motivated and in the law of averages, there are lots of ways to fail in a larger project. According to Todd, working solo is not well suited to long-term projects but works well with short term projects. It’s easy to get depressed, bored, and distracted. Despite the strength of your work ethic, the lack of deadlines and the office environment with others to buoy you up often make it harder to complete games. He advocates the idea of a “game in 7 days” where the idea is to make a game in under a week, forcing you to adapt to a time limit. His games Garden, Beekeeper and Broken Brothers were all 7-day games.

Benefits of making games in 7 days:

  • Some game design scales, while some doesn’t. Lessons learned for small projects are often the exact same learnings as for a larger project but you learn them faster.
  • Game in 7 days forces you to make simple choices and creates a clear success/failure feedback loop so you can learn how to do it better each time.
  • Building experience – you’re creating actual games, not mods/game docs. This is a great way to get games onto your resume to get into a gaming career.
  • Understanding the need for simplicity in design because you have to plan and time-manage closely to complete a game in 7 days.
  • Game in 7 days allows you to try crazy ideas that you wouldn’t risk for a larger project. Afterall, it’s only a weeks worth of time!
  • Petri Purho did 10 games per week until he got crayon physics. Compare this to warcraft 3 or spore and it’s a lifetime to get 10 games out.

Todd candidly admits that small free indie games don’t make any money, and cautions the audience not to have the expectation of becoming millionaires overnight – “statistically, it’s not going to happen”. However, creating many small games does increase the chance of succeeding and being turned into a large game that does make money. Making games in a week over a few months is a great way to increase your ability to properly design, build and finish a game and this teaches you the discipline to finish a game with a limited amount of resources.

The Pros of Working Solo

  • Perfect team communication and high efficiency. Two people is the worst team size for games because there’s a cost to communication and everything has to be verbalized.
  • Passion – get to make the game you want to make (idea method style)
  • Money – You get all (most) of the money. Even a decent sized check split between 3 people quickly becomes a small amount for each person.
  • Doing whatever you want

The Cons of Working Solo

  • Less total labor available.
  • Multi-tasking and dealing with art, programming, design & business on your own.
  • Prone to failure over long time periods because it’s hard to stay motivated.
  • You pay for everything (even if you get to keep all the money that comes in)
  • Doing whatever you want can bite you, because it can be hard to maintain a good work ethic.

Development in Practice

If you’re trying to work successfully as a solo developer, Todd recommends that you get rid of your TV and other distractions and try to connect with a community. To actually get this done, he cited a couple things: using easy tools like Flash, Gamemaker and Unity to get started building games quickly; learning colour theory (“If you don’t know it, learn it, it’s awesome”); and combining several easy cool art styles if you’re not great at art — e.g., combined circles, lines, shapes, tiny art. He emphasizes avoiding programmer OCD and getting bogged down in the small details (perfect spacing, comments, etc.) and focusing on getting the game out while staying motivated. Having a good relationship with other indie developers in town can be be crucial for this. “Don’t get ground down into making a dull game,” he cautions, “Get your game out early and get feedback so it’s fun.”

This is a re-post of an article I wrote last week on MochiLand. Original post linked here.

Google Stops the Dance Music

Posted in Advertising by Ada Chen on 15 August 2009

google-dance
The Wall Street Journal reports that Google has discontinued Google Dance, their annual search geek party at Search Engine Strategies. I attended Google Dance back in 2007 and was blown away by the scale of the free food, beer and events that Google organized for the search community.

While Google cites “cost-cutting efforts” as a reason for ending the dance, I interpret this as a sign that search marketing has grown up. The dance was started back in 2002 when search marketing as a discipline was in its infancy. In its emergence, Google Dance was a brilliant marketing tactic to incubate the industry as a whole and firmly entrench their brand at the top. They took a small search conference and made a blow-out event of it. At Google Dance, they plied search geeks with beer and dance parties, shuttling them from SES to the Googleplex to a chorus of hi5′ing Google search account managers for years.

Today, search marketing is well and truly established and the dance isn’t necessary anymore. According to MarketingSherpa, hiring skilled search marketers is not so hard these days:

Good help will always be hard to find, but locating someone with knowledge of SEM is getting easier as the industry matures. With nearly two-thirds of all respondents in 2009 reporting that it is “not difficult” to hire good help, it’s a blessing and a curse for search marketers, depending on which side of the equation they fall.

If you’re trying to grow a community, this is a great way to do it. Ending the dance is the equivalent of peeling the ‘Beta’ sticker off the search marketing industry.

Video and Notes from Casual Connect 2009: Emerging Revenue Channels for Flash Games, Social Networking and Branded Games

Posted in Games by Ada Chen on 31 July 2009

In addition to my observations from Casual Connect, I spoke at the conference about emerging revenue channels within Flash games. I’ve posted a full writeup of the talk and slides on my company’s blog, and embedded the slides below.

Earlier last week, I also joined the Leadership Development Forum to lead a roundtable on “Social Networking and Branded Games” with Vicky Tamaru of Plexipixel. Hosted WordPress doesn’t let me embed the video but you can watch the roundtable summary here on Ustream. Thanks to Deborah from GarageGames for an eloquent recap!

Casual Connect 2009 Recap and Observations

Posted in Games by Ada Chen on 25 July 2009

Casual Connect Seattle

I just wrapped up the week at Casual Connect in Seattle. Overall, a great conference and big kudos to Jessica Tams and the Casual Games Association team for putting it on and growing the attendance to new highs in a difficult economy. :-) I’m not planning to spend too much time summarizing the content, though there’s some great overviews of the content out there already – Gamezebo has some nice roundups and there are some good summaries of sessions like how Corpse Craft turned RTS Casual and Jim and Greg from Kongregate on Fatal Flaws in Flash Game Design and Development. Instead, here’s a couple different observations on the “pulse” of the games industry from walking around the conference and talking to people.

1) Casual games come in all shapes and sizes

There was a big lift in non-downloadable casual games companies this year compared to last. While there was a continued strong presence from the standard casual downloadable companies such as Big Fish Games, RealGames, and PopCap, there was a much larger representation from companies specializing in Facebook games, iPhone games, mobile games, and online games. There are quite a lot of companies that fit under the casual games umbrella, including Nintendo which participated as the keynote speaker at this year’s conference. I’m still not seeing a large number of the virtual worlds hanging out at this conference, but there was quite a lot of cross-pollination of information going on this year from companies trying to learn more about adjacent casual gaming spaces to expand their development efforts into.

2) Social games are the year’s darling in casual games

With Zynga’s rumored $100 million in annual revenues, there’s renewed interest in social games. Zynga, Playfish, and RockYou were among the companies that attended the show. Zynga notably had a huge booth and a lot of recruiters hanging out. Social games are generating excitement because they are transcending traditional gamer demographics, moving beyond “casual” as middle-aged women or or “core” as male gamers. Many of the social gamers aren’t the usual set of gamers, but instead first-time gamers that are expanding the industry instead of cannibalizing it.

Along with social games companies comes the trend of trying to directly monetize this new expanded segment of users that have various levels of willingness to pay. Instead of charging $20 for a downloadable game or $60 for a console game, there’s increasing interest in monetizing users through micro-payments and direct transactions. We’re on the bandwagon with this (and very excited about it!), as my company Mochi Media launched Mochi Coins this week, a platform for Flash games micro-transactions at Casual Connect this week. To capitalize on this trend, I saw many payment providers taking meetings at the show including the whole market of the incentivized offer providers (SuperRewards, OfferPal Media, Peanut Labs, TrialPay and Gambit) as well as various retail payment card providers such as the PaySafeCard with a presence.

3) The dream of having a game live across multiple screens is still alive and kicking

Games across many screens is not really a new concept, but it’s definitely alive and in force this year, particularly in mobile. From my own corner of the industry, we’re definitely seeing Flash games move to iPhone (Ninja Kiwi, Gimme5games, Armor Games, and AddictingGames are just a few examples of this) as well as onto the social games platform (e.g., the cloning of Boomshine for Chain Rxn). Mass audience appeal can be proved relatively cheaply through Flash games metrics, and the simple game mechanics of Flash games are pretty easily transferred to other platforms. With big platforms like Facebook connect beginning to emerge, there’s real possibilities of extending games onto multiple platforms and building an engaging experience that transcends the space.

There’s a couple factors that are starting to enable games to move to mobile. There’s been an increase in consumers that have access to high-end phones that are capable of supporting games; prior to this, these phones were mostly for business use. There’s a couple blocking factors that seem to be standing in the way though – mobile has a notoriety problem which is partially founded in truth, in particular with the difficulty it is to get games normalized to handsets. There’s still quite a challenge around standardization and fragmentation of platforms and languages, but also a lot of solutions emerging on how games can be consistently ported to across. That said, it’s also a great opportunity – one great stat that I heard from AT&T was that there’s a significant overlap in the audience for these high-end mobile phones with older women, which are also the monetizable demographic that is currently casual downloadable games. Mobile also has less purchase friction from web-based games in that transactions can take place easily through the carrier, and just show up on consumer bills.

4) Anxiety around pricing pressure in the casual downloadable market

A lot of the interest from the casual games community in crossing gamer platforms and selling directly to users seems to be stemming from anxiety around the downward pricing pressure that’s occuring in the industry. Many publishers of downloadable games are looking for alternative revenue streams when so much of the market is largely dominated and controlled by big portals such as Big Fish Games and RealGames. The portals are increasingly experimenting with discounting, subscriptions and low price points to drive large volumes of sales for consumers. While this increases conversions among users that aren’t willing to pay full price, overall this is trending toward diminishing the returns for the actual developers that are spending just as much money in developing their games. Incidentally, this issue is also cropping up in related industries such iPhone with the downward pressure to price at $0.99 to drive volume and rank in the charts at the expense of price.

In light of this, it’s great to see PopCap’s success with differentiating itself with things like Plants vs. Zombies. I definitely give them best schwag of the show for their sunflower seeds in the tote bags!

5) Analytics and optimization as core competencies, versus brand and IP

One of the things which I admire about Big Fish Games is the idea that at net, they are an extremely effective CRM machine in terms of acquiring, retaining and converting their consumers. They focus on really creating a well-tuned conversion funnel and segmenting their consumers through varying pricing strategies for games. To offset #4, the downside of this efficiency seems to be the downward pressure on pricing overall as games become more commoditized. It seems worthwhile to note that there’s a real division between companies with core competencies stemming from analytics/CRM, or competencies based on branding/IP. Big Fish and many of the social games are on one side — these companies are focused on ARPU, conversion funnels, and hard-core data-mining to drive consumer segmentation. These guys don’t care so much about graphics. On the other side, the more traditional game company is focused on brand, IP, and creating great games that attract press and attention. The latter is really effective in a world where word of mouth and buzz drives distribution. However, online distribution and virality is providing the opportunity for lots of brand new IP to quickly gain ground and buzz (Playfish is a great example of this). Traditional companies that want to adopt these new mediums really need to come around and reconcile the difference to move from the more “packaged goods” view focused on brand to thinking more about analytics, funnels and distribution.

In Conclusion

Learned a lot of great things at this year’s conference, and it’s exciting to see that there’s so much change afoot in the industry even since last year. The casual games industry and space is definitely growing overall – thanks again to the CGA for bringing everyone together!

The World of Flash Games

Posted in Games by Ada Chen on 24 March 2009
Opening at Flash Gaming Summit

Opening at Flash Gaming Summit

We just wrapped up Flash Gaming Summit on Sunday and it was a packed event with lots of interesting discussions and thoughts come out of it. There was a good mix of games-related companies, game portals and independent developers. I thought the most interesting conversations came discussion around Flash games intersecting with multi-player, virtual MMOs and social games. As games increase in quality, richer multi-player experiences enable them to increase the engagement beyond the majority short-form content that exists today into content that drives repeatable plays. One interesting stat from the conference was Jim Greer stating that 20% of the game plays on Kongregate are from multiplayer games. I’d be curious to know the engagement time, to contrast the multi-player engagement with AddictingGames’ stat that Flash games hit the sweet spot with 5-7 minutes of engagement.

Here’s a link to my re-cap on MochiLand, with photo and video from the event. You can also refer to coverage from Gamezebo, Futuristic Play, Sachin Rekhi and Iman about the space.