Casual Games Maker WorldWinner Falls into Facebook’s Orbit

When I visited WorldWinner back in March 2008, executives at the Newton, MA-based game developer were excited about the company’s ongoing integration with the Game Show Network (GSN) and by its success attracting huge numbers of people—some 26 million each year—to its tournament-based online casual games. But chief technology officer Michael Enright, answering a question about life for game developers in the Boston area, closed on an ominous note. “One of the things about the gaming industry here is that it can be a struggle to find companies that have good business models and long-term jobs,” Enright said. “The models are always evolving, which makes it really challenging for people who want to make this a profession.”

How right Enright was. Just two years later, WorldWinner has changed owners (its former parent company, Liberty Media, sold its share of GSN to Sony Pictures and DirecTV last May) and significantly altered its business strategy. It still offers arcade games, card games, and word games where players compete for cash in fee-based online tournaments. But that’s not where the real audience growth is these days. Today, casual gamers by the tens of millions are flocking to two places: Facebook and mobile devices.

“Like every other part of the digital world, the game industry has been turned upside down in the last nine to 12 months,” says Peter Blacklow, president of WorldWinner and executive vice president of GSN Digital, of which WorldWinner is a part. “If you are not figuring out how to leverage these platforms where the distribution cost is zero, you will be out of business. That is a huge difference for us. Instead of thinking about how to drive consumers to our destination site, we have to think about putting our tournament competition business where the consumer is going, which means inside a Facebook app or inside a game on your cell phone.”

Dumbville Splash ScreenOn April 1, GSN Digital launched its first major social game on Facebook, called Dumbville. It’s a timed trivia game where players compete against their Facebook friends to see who’s smarter (or dumber, as the case may be), earning points called “oodles” that can be redeemed for cash and prizes. The interesting twist is that players win oodles not only when they answer questions correctly, but when their friends get answers wrong. When I checked yesterday, the game already had 42,000 players—which sounds like a lot, but it’s only scratching the surface of the overall Facebook population, which is somewhere north of 400 million.

Blacklow says opening Dumbville was smart strategy for WorldWinner in several ways. First, it drives players to sign up for accounts on the GSN and WorldWinner destination sites, which is the only place they can redeem oodles, and where the company earns revenue through a combination of premium advertising and tournament fees. The game is also a proving ground for the developers on the company’s “GSN Labs” team, who will launch two more big Facebook games this summer, based on famous game-show titles that Blacklow says he can’t yet name publicly.

Finally, WorldWinner and GSN hope to sell their technology for setting up cash competitions to other casual game publishers active inside Facebook, such asPopCap and Arcadium Games. The company has long provided its tournament platform to other online communities, such as AOL, MSN, and Electronic Arts’ Pogo—but compared to these sites, the Facebook audience has reached overpowering proportions. “Now you have one Facebook app, Bejeweled Blitz, that has more players than the AOL, MSN, and Pogo versions of Bejeweled combined,” Blacklow says. (The game has a stunning 10 million players on Facebook.) “We have the best monetization model for casual games, and we can be a monetization engine for your content, whether that’s inside Facebook or outside.”

WorldWinner has had its eye on Facebook for a long time, but was waiting for the right moment to invest. “We were the first games company to buy a sponsored group on Facebook,” back in 2006 or so, Blacklow says. “That was completely the wrong model, spending $35,000 a month on a sponsored group—it had really low ROI—but it always felt like Facebook was the right place to be. It’s only in the last nine months or so that people have built up a critical mass on Facebook games, other than Scrabulous, which started the social game craze. Now, when the Zangas and Playdoms and Playfishes have created the critical mass, the timing is perfect. None of them have any intention of getting into cash tournament games, but they all know there is no better way to generate revenue.”

The turn toward Facebook has distracted WorldWinner from one of the big projects that was in the works two years ago, when I first visited. That was an effort to convert most of its Web-based games, which depend on Microsoft’s DirectX animation technology and therefore only work on Windows computers running the Internet Explorer browser, into Flash-based games that would work on any computer, including Macs. That still hasn’t happened at the WorldWinner destination site—if you’re a Mac user, you’re out of luck. But the Flash work turned out to be crucial to the company’s Facebook strategy, since Flash is the only game format that works inside Facebook.

“I was on a game panel the other day with Jeff Anderson of Quick Hit, and he was saying ‘You ignore the social platforms at your own peril,'” Blacklow says. (Indeed, Quick Hit—which we’ve profiled in Xconomy a couple of times—is active on Facebook, where its profile has more than 7,000 fans.) “Even our top distribution partners such as Pogo, as dominant as they have been for the last 10 years, have started to generate fewer registrations for the WorldWinner games. That doesn’t mean the destination site will go away, but the growth is certainly slowing. So you’d better figure out what works on Facebook. Otherwise you could be out of business in five years.”

While Blacklow started out by mentioning mobile phones in the same breath as Facebook, he didn’t talk much about WorldWinner’s strategy in that realm, except to say that the programming interfaces the company has developed to help other publishers turn their Facebook games into cash tournaments would also work for iPhone or iPad games. “We can have a nice eight-figure business just on, but to really scale this business into nine figures, we have got to be able to export that tournament infrastructure to other platforms,” he says. So it wouldn’t be surprising, well before another two years have passed, to see the company making announcements about deals with developers and distributors of mobile games, or launching its own. As Enright said, the models are always evolving.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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