Are Casual Games Dead? Viximo and Z2Live Founders Weigh In Coast-to-Coast on Social Gaming Movement
There’s a little East Coast-West Coast brouhaha going on in the world of video games.
I just spent a couple years in one of the casual gaming (and core gaming) epicenters of the world—Seattle. Little did I know the city might be becoming a graveyard of companies stuck in the past. At least, that could be true of casual game developers and publishers who are late to the social gaming party.
That’s according to Brian Balfour, the founder of Cambridge, MA-based Viximo, a startup that makes software to help Web publishers, social networks, and social game developers make money from sales of virtual goods. Previously, Balfour founded a couple of startups in social networking and interactive entertainment, and worked for ZoomInfo; plus he’s an original member of the co-working space Betahouse, so he’s very in tune with the Boston tech entrepreneur community. He currently serves as Viximo’s vice president of product marketing.
Balfour wrote a provocative blog post earlier this week, detailing his thoughts after attending the Casual Connect conference in Seattle last month. In the post, he gives “three reasons why casual gaming is over,” and talks about what traditional casual game studios and distributors need to do to get with the social program. (For starters, it sounds like Casual Connect should integrate its panels and programs on social gaming with the main-hall presentations. Balfour says social gaming was relegated to a separate venue across the street.)
Traditional casual game companies “largely missed the boat,” Balfour told me in an interview. “Their existing models of downloads and ads are completely broken.” What’s more, Balfour says, their traditional distribution models (content portals and gaming sites) don’t work as well anymore. Big studios like EA have the resources to make strategic acquisitions and catch up, he says, but most smaller companies won’t.
Balfour didn’t want to call out any companies specifically. But I will. Seattle is home to many casual-game pioneers, like WildTangent, PopCap Games, Big Fish Games, and GameHouse (RealNetworks); game distributor Oberon also has a strong presence there. Here in Boston, GSN’s WorldWinner is one of the leading casual-games producers. To oversimplify things a bit, most of these companies made their hay with paid-downloadable or advertising-supported games that people generally play by themselves. Adjusting to a post-Facebook and Zynga world, where lots of people play games with their friends and compete for virtual goods and prizes, is a big challenge.
“A lot of casual game companies are in a tough position,” Balfour tells me. “But they’re not going to plummet tomorrow. Many will make their attempt at social games, but only a few will make a successful transition. The other majority will fail, and will consolidate for cheap amounts.” In any case, he adds, “It’s obvious a lot of those companies are on the block to be sold.”
It’s clear that Balfour and Viximo, being in the virtual goods business, have an interest in seeing the social games revolution gain steam. But knowing Seattleites—and their fierce pride in the region’s gaming expertise—I figured I’d get a strong reaction to Balfour’s argument from the Northwest. So I reached out to David Bluhm, the co-founder and CEO of Seattle-based Z2Live, which has developed a software platform for making mobile games social.
Bluhm has plenty of experience tracking the casual games market and business models. Z2Live, for example, helps companies like Big Fish take games such as hidden-object puzzles and make them into multiplayer mobile games, available on iPhones, iPads, and iPods through the iTunes App Store. (Though Big Fish has maintained its traditional model of selling its downloadable games for real money, instead of moving to “freemium” models with in-app purchase incentives. Bluhm says there is “a lot of growing concern over the adoption of Web-based, free-to-play models effectively moving to mobile where it is still hard to grow communities” across different carriers and devices.)
In response to the Viximo blog post, Bluhm wrote me via e-mail:
“1. There are multiple $100M+ businesses (even just here in Seattle—such as Big Fish, PopCap, GameHouse, and Microsoft) selling casual games across a wide variety of platforms. Many are solid, great, profitable casual game businesses.
2. Viximo is correct to note that social game companies have, in fact, created greater shareholder value and been better financially rewarded than any other segment in gaming as of late (i.e. Playdom, PlayFish, Zynga). There is a clear trend towards social that will not likely diminish.
3. But….many of the traditional casual game companies will have an easier time building communities and social experiences around their existing and vast IP—than most new, upstart social game entrants. The incumbents have very loyal customers and deliver great game experiences.
4. Big media, portals and publishers will buy their way into social gaming (Disney/EA/Google).
5. And in some cases, the incumbents will fail to make the transition and eventually become smaller players or faded memories.”
So it sounds like it remains to be seen how the traditional casual-game makers and distributors will fare in the social world. And despite the meteoric rise of companies like Playdom and Zynga, it’s not clear that all casual gamers want their experiences to be social—WorldWinner, for example, says many of its players are professional women or full-time moms who just like to grab an occasional 30 minutes of “me time.” But it is interesting that both Balfour and Bluhm agree there will be some consolidation in the casual games sector.