Ada on Startup Marketing (@adachen)

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.

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.

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.

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.

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.



• 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.

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.

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.

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.

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!

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!

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.

Games are hot lately and GDC 2009 is just around the corner. When talking about games, most people tend to think about the business of making games in the loose terms of console, casual and mobile. However, the casual games industry is definitely a lot more segmented than that. The conversations become radically different depending on what group you’re speaking with. The basis for why this is stems from the underlying economics of each industry. This can be summed up in one question: How are you monetizing your users?

Put a grab bag of casual games people in the online games industry together in a room, and the conversations will be incredibly diverse – ranging from CPMs, RPMs, ARPUs, sponsorship deals, publisher relationships, and viral co-efficients. In the end, they are all trying to answer the same question (how much money can I make?) but speaking with with different dialects. Here’s how those dialects, in a rough way, break out.

Web games, defined as distributed browser-based games that are not dependent on a destination site, primarily monetize users via advertising. Gamers playing these web games are predominantly monetized via advertising today. Developers monetize games via in-game ads such as Mochi Media (where I work) and game portals hosting the content monetize the games via around-game ads. Developers license their content, do custom development deals, and sell game sponsorships to portals, who do these deals as a vehicle for traffic acquisition. Direct user monetization via micro-transactions and purchases are still emerging. In a primarily ad-based market – developers and game portals are primarily focused on advertising-centric metrics: number of sites where the game is distributed, number of game plays, RPMs, CPMs, average click-through rate of advertisements, page views, time on site, efficient traffic acquisition, and basic retention stats to get people to come back.

Casual downloadable games, which are typically downloaded games that users can trial and then purchase. These are typically monetized via direct one-time user sales from the game publisher. Developers typically work with an oligopoly of game portals who publish their games and sell them to a user base which they maintain, paying back a rev-share to the game creator. With these limited distribution channels, the success of a game is largely dependent on getting onto the Top 10 list for a long enough period of time to make a profit. With the glut of games coming into the market, margins are getting slimmer, however, and several suggestions to improve this model are emerging. Due to this model, however, most conversations in the downloadable space focus on publisher partnership development, developer community, channel management strategies, franchisable IPs and the stats are transaction focused – conversion rates, sales, break-even sales, etc.

Virtual worlds, or destination-based virtual worlds where users inhabit the world and interact with one another with virtual representations of themselves. These are typically monetized via a mixed bag of advertising, subscription streams and virtual goods. The creator of the website is focused on engagement, retention and content to directly monetize users through purchases. These virtual worlds therefore, are keeping an eye on the advertising numbers but are most concerned about retention and payment stats – PVs/visit, payment fraud, cohort analysis, engagement funnels, ARPUs and balancing their virtual economy so that the available money isn’t too much or too little. In addition, they are very focused on community management and support issues.

Social games, which blur quite a bit with virtual worlds, are games which are deeply integrated with the social graph and APIs available on social networks. Social game developers make money from the users playing these games, with a combination of incentivized CPA offer networks and direct payments. These developers are focused on honing their viral loops to acquire new users into the system, creating engagement funnels to engage those users and convert them, and measure ARPUs for the users. Unlike virtual worlds though, there’s less of an emphasis on community management since everyone playing the game with you is theoretically managed by the social graph, but instead more emphasis on viral spread.

I’ve been busy organizing the Flash Gaming Summit this coming week, which is a one-day conference dedicated exclusively to the Flash game development community. The conference is a mix of speaker sessions and panels, and also features The Mochis, which recognizes the best Flash Games of 2008.

Check out this amazing video which Brandon from WeGame made for us to recognize the finalists.

We’ve had an amazing response from the Flash games community for this event, and the event sold out last week. Unfortunately if you’re not registered already you’re out of luck, but you can still follow it on Ustream, where we will be streaming the conference content.