Gaming the Industry: Defining, Pitching, and Monetizing Casual Games at Casual Connect

7/24/08Follow @gthuang

What exactly is “casual” gaming? My impression was that it’s a term to describe short video games that are usually played online with a minimum of software downloads and time commitment—things like solitaire and various brainteaser games. As opposed to “core” gaming, which spans the role-playing, virtual-world, and shoot-em-up market segments, traditionally played on consoles. Although both have huge markets, the conventional wisdom was that the two types of games don’t overlap much in terms of their players.

But times are changing, said Paul Thelen, founder and chief strategy officer of Seattle-based Big Fish Games, in a keynote talk yesterday morning at the Casual Connect gaming conference in downtown Seattle. Thelen presented survey results that showed, for instance, that heavy-action core gamers (typically boys and young men) are also likely to play casual games that involve puzzles, trivia, and hidden-object searches (usually thought of as the older female demographic). “Continuing to categorize a gamer as only a core or casual player is limiting,” he said.

That point was driven home in the next keynote by Trip Hawkins, founder and CEO of Digital Chocolate (and founder of gaming giant Electronic Arts). Hawkins, an Xconomist, spoke about the massive potential for games to reach not just core or casual gamers, but also everyone else—what he calls “omni” gamers. That includes people who don’t own consoles or play games online, but who might play Guitar Hero or Wii Sports at a friend’s house (like me).

I caught up with Hawkins later in the day to follow up on a few points. Right now, he said, each segment of the market might have 50 to 100 million gamers worldwide. “But we need to address a new market segment, the next billion gamers…the ones who don’t think of themselves as gamers.” And to do that, he added, games need to work in Web browsers instead of requiring downloads, and they need to work across the full spectrum of computing devices. “You’ve got to make a more agile form of software that will work on different platforms.”

As a step towards that vision, Hawkins mentioned that Digital Chocolate, which he called “the Pixar of mobile games,” has sold some 40 million downloads for mobile phones, for $5 to $10 each, and is making inroads on social-networking sites like Facebook.

It’s definitely a new world out there. Distinctions between casual and core gaming seem to matter less and less, while the ability to push games onto phones and social websites is becoming increasingly crucial to business. And, perhaps, to society as a whole. Hawkins argues strongly for the mental-health benefits of games and the increased social interactions that are spurred by playing them. “Conventional media is dead as a growth story,” he says. “People are looking to social media to have new ways to check in.”

Some other highlights from the conference’s first day:

How to pitch your game idea

This was a really interesting panel discussion led by Teagen Densmore, a producer at GameHouse, a division of RealNetworks. It was geared towards game developers pitching ideas within their own company, but I found universal lessons that seem to apply to everything from VC pitches to story pitches in journalism.

Tony Leamer of New York-based Oberon Media (which has a Seattle office) gave some pointers on how to speak the language of marketing in a game pitch: “You need to answer three questions. How much will it sell, who will it sell to, and why is it going to sell? That’s all the marketing-speak you need to know. It’s about understanding your audience.” And if your pitch fails, he added, “It might be the pitch, it might be the marketing guy, or it might be that your idea totally sucks… Really smart, creative people do come up with bad ideas.”

“Not everyone will love your idea, so you can’t take it to heart,” said Jonathan Grant, a producer and designer at local gaming startup Smith & Tinker. “Do not try to tell people what you think they want to hear. You really have to be true to the spirit of your own desires.”

Cary Ely, a producer/designer at I-Play, the Seattle-based publishing division of Oberon, added, “Pitches are always difficult. There are always 100 reasons not to do a game…Enthusiasm is important. You should feel the game has to be made.” She pointed to one recent I-Play success—Dream Day Wedding, which was pitched as a seek-and-find game with beautiful, romantic backgrounds—and also a failed pitch of her own, Supermodel Roller Derby.

How to make money off casual games

This was an interesting talk by Ada Chen, product marketing manager at San Francisco-based advertising network Mochi Media (slogan: “We don’t make games, we make games profitable”). First, a key stat that shows how far online games still have to go. Advertisers in the U.S. spend less than 0.1 percent of their budgets in the gaming sector—but that could change fast if people figure out how to make money from casual games.

Mochi Media focuses on indie Web game developers, small teams, and fast development cycles, she said. That is, online games that typically run on Flash or Shockwave software, not downloadable or installed games, and not massively multiplayer online games.

What’s changed in the past couple years, says Chen, is increased access to games through Flash players and the like (“there are eyeballs out there”), better resources for developers, a broadening of the gaming audience to include more women and older consumers (“this is really interesting for advertising”), and advances in how to profit from games.

On the last point, Chen highlighted a few up-and-coming methods for cashing in on the growing casual game market. It was eye-opening to see all the different ways being tried already, and it’ll be interesting to see which, if any, take off:

—Around-game ads. These run alongside or in conjunction with the game, and are provided by companies like Mochi and Google.

—Game portal sponsorships. Sponsor companies can purchase branding or links to drive traffic to a portal’s site. In the last few months, a developer site called FlashGameLicense has sprung up to help games and sponsors find each other. Chen described it as “like eBay for games”—sponsors can check out games and make offers to buy or license them online.

—Revenue share. Big companies like Microsoft, Kongregate, and Shockwave can share revenue with the game developer based on the performance (traffic numbers) of the game.

—Licensing. Look out for “advergames,” custom ads for specific kinds of sites and devices that look like games. MTV is doing this already.

—In-game ads. These are displayed as elements of the game itself. There’s not much of this yet in the Flash games space, but it’s coming.

—Micro-transactions. These are small payments made by users to unlock features in a game. It could take off, but it’s highly dependent on marketing, and spreading across the Internet on different sites.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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