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Catching up with Playfish's John Earner about Crazy Planets, social networks and the end of platformsSep 02, 2009 (Crispy Gamer (crispygamer.com) - McClatchy-Tribune News Service via COMTEX) -- Social gaming is in its infancy. While console makers are trying to figure out what "social gaming" means beyond playing together with friends in your living room or across a vast worldwide network, other companies are creating powerful products on Facebook and MySpace that cost very little to make and operate, and have the potential of reaching millions of users without spending a single advertising dollar. If you have a Facebook account, you have probably read an endless stream of status updates from your friends about the things they are doing in "Mafia Wars," "FarmVille," "Pet Society" and more. And as overwhelming as that can be, it shows the viral nature of these games _ while not everyone on Facebook may be playing, chances are, at least one person you know is. Smart companies know the score: Facebook has the potential to be as hot a platform as the iPhone. One such company at the forefront of this is Playfish, founded by four former executives of Glu Mobile. Recently Crispy Gamer had the opportunity to talk at length with John Earner, Vice President of Product Management at Playfish, about the business of social gaming, the company's games and how this company is at the forefront of the social gaming revolution. Q: In October of 2008, you guys had like 10 million monthly active users playing on Facebook ... and in July (2009) you hit the 30 million monthly-user mark. So have the numbers changed since July, and how many active users do you hope to have by the end of the year? A: That's a great question. To the first point, we are now a little bit over 40 million active users a month, and we're very proud of that. We are growing faster than we have ever grown before, and this is due to the fact that platforms such as Facebook are growing so quickly. But also due, in part, to our increasing understanding on how to make games that are truly social that people truly want to play with each other. We've recently launched two games, and they are helping drive our growth: Crazy Planets and Country Story, which is a farm game that we just launched a few weeks ago. I would say that our goal is for gaming to be a mass-market entertainment medium, and we know that there are over 300 million people on Facebook (in the U.S.) and there is a similar number in China. There are 200 million more on other social networks. We are quickly getting to the point where there's going to be well over a billion to a billion and a half on social networks. We think those people are going to enjoy playing games. So we try to benchmark our success on the big picture: How many of those people can we get to find and enjoy social games? I think a second metric we use is financial: Worldwide, the gaming business, broadly defined, is an over $40-billion-dollar-a-year business. We think it is reasonable to assume that, at some point in the next few years, social gaming comprises a good chunk of that. Certainly not all of it, but certainly much more than the few-hundred-million-dollar business that it is today. Q: That's a good point, but here's the million-dollar question: How does your company monetize that (besides on iPhone) _ how do you make money on Facebook, MySpace and Bebo? A: Great question. First, some background: We are venture-funded by Accel Partners and Index Ventures, two tier-one venture capital firms. We have $21 million in funding. We don't need to touch that money. We are highly profitable _ although I can't share our exact revenue numbers _ and the way we do it is a combination of advertising, direct transactions from players spending a few dollars at a time on virtual items or perks in each of our games, and the ability for users to complete offers for free coins. Amongst those three things we've found quite a profitable business. Microtransactions have been getting a lot of press and hype for being the next possible business-model paradigm. Whether or not it can change journalism or the Internet remains to be told, but we know it's a highly successful business model for games, and one that serves us quite well. What's really going on here is that the last generation of online games was predicated on a person playing the game for an hour, and making a quick decision after that hour whether or not they wanted to spend $9.99 and download a casual game. That model doesn't make sense, because people have so many choices and so little time to make an impulsive decision in that hour on whether or not to spend $10. By making the games free-to-play and virtually distributed _ socially distributed on Facebook and MySpace _ everyone gets a chance to enjoy the game. And some percentage of those people _ a single-digit number, but a good one _ over time realize that they can improve their game experience by increasing their status or leveling up faster, and they choose to spend money. And that model is an effective model with which you can have tens of millions of people playing your game every month. Q: I notice that you have two or three games on iPhone _ or rather, there's one out and two others are coming to iPhone at a later date. Is connectivity between iPhone and Facebook important to users? Is it a selling point for users, or do they just consider it a nice extra? A: We believe that it's a strong selling point. As an anecdote to support that, the vast majority of people who have downloaded "Who Has the Biggest Brain?" for iPhone (that's our first iPhone game) are absolutely using Facebook Connect. They have Connect enabled for that particular app. I would say, longer-term, the entire notion of a device is going to go away in gaming. It is going to cease to be about what device you use to play the game _ whether it's your PC or your iPhone _ and it's going to be about the shared experience. We think "Who Has the Biggest Brain?" is the beginning of that. No matter how you access it, the person is able to compare their scores and see how their friends are doing. We'd really like to move away from a device-centric world and move to an experience-centric world. (EDITORS: BEGIN OPTIONAL TRIM) Q: You mentioned that you worked for PlayStation Network. Do you think a game like "Crazy Planets" would work on PlayStation Network or Xbox Live, or the DS or Wii or Steam, or any other platforms? A: Yeah, sure. I think Steam would potentially work. As someone who has worked in that kind of space before, I think those platforms are doing some interesting things to try and get into the social gaming space. I do think there are some things that have fundamentally changed, or are in the process of changing, in gaming; and those platforms will have to adapt. First of all, there's just a larger volume of people who are logging on to Facebook every day than people who log on to Xbox Live. And I don't think that's going to change, because of the hardware and purchase requirements it takes to get an Xbox 360. Hundreds of millions of people have a PC in their homes already. So that's one thing. The second is the catalogue environment. One of the fundamental things that makes our business and our company tick is a lack of a catalogue environment. What I mean by that is that players don't find games like "Crazy Planets" by going to a directory _ a miniscule percent of people find "Crazy Planets" in that manner. The way to find "Crazy Planets" or any of our other games is by word of mouth. That word-of-mouth attention doesn't exist in any form on Xbox Live or PlayStation Network. They will need to be there to enjoy the kind of success Facebook is enjoying in gaming. (END OPTIONAL TRIM) Q: Let's talk about what the most popular Playfish game on Facebook is right now. A: Right now, the most popular game from Playfish on Facebook is "Pet Society." "Pet Society" was launched a year ago, and has just over 12 million monthly active users. It's basically a virtual world in which you adopt a pet, care for it, and buy various items for it and its apartment; as well as a number of mini-games that you can play. I think what really revolutionized that game versus earlier "pets" games is that we in the gaming industry are more familiar with its socialness. A significant portion of social items purchased in that game are purchased with the intent to give them to your friends. You are able to visit your friends' apartments, see how they have expressed themselves, trade gifts, keep up to date with one another, etc. The game really is best played with your friends. Q: So, that at the top of the heap ... A: That is our top game. We have a bunch of very successful games, though. "Restaurant City" is a little over 2.8 million daily active users right now. It's similarly in a casual format like "Pet Society," but the purpose of that game is to design, build, and operate your own restaurant, and it's all taking place in the context of a neighborhood of restaurants owned by your friends. That's our second-biggest game. Our fastest-growing at this moment is "Country Story," which launched a few weeks ago. We really think it takes the genre of farm/sim/social game to the next level. (EDITORS: STORY CAN END HERE) Q: You probably can't disclose this, but I'm going to ask anyway: How much of a budget do you spend on these games? Because it seems to me that they are doing better than some of these big-budget titles in terms of user numbers. A: Yeah, well, I can't share an exact number, but we can ballpark it. The amount we spend on our titles is hundreds of thousands of dollars versus tens of millions of dollars. So you're looking at two levels of magnitude between a big-budget console title and a social game. We, by the way, are on the high end of development cost for social games because of our production values. We can build one of these games for launch in a few months _ let's call it two to six months _ depending on the title. We can then launch the title, but it's really only 5 to 10 percent complete. A whole slough of the features we intend for that game, we haven't gotten to yet. The advantage of that is that we can get an early read on how successful the game is going to be, and what players really want. Then we can allocate the brunt of our resources over time. So, for example, over the past year we have invested millions of dollars in "Pet Society" if you add up the number of resources allocated and the time spent. But we only invested those resources upon knowing that that game was going to be a tremendous success, which really minimized our risk and maximized our ability to provide games and experiences our players want. To get back to your point, I agree with you. It seems like a pretty compelling way of breaking out of a rut that traditional games are in because it is a hit-driven business, and you have no visibility on whether or not your game is going to be a hit and the vast majority of the costs incurred. Q: Let me just touch on iPhone and mobile platforms for a moment. Is Crazy Planets a game that you plan to bring to that platform? Will it work on the iPhone? A: We haven't announced any plans as of yet, but I don't think you'll see this game on iPhone immediately. Certainly it's a possibility. We have an existing pipeline of iPhone games we've already announced that you'll be seeing _ "Geo Challenge," for example. So I think that's where we are going to go first. iPhone is a great platform, and there are a lot of exciting things going on there. There are a few tricks that would really make a game like "Crazy Planets" work better on it _ mainly microtransactions. iPhone 3.0 does allow for microtransactions, but it also requires that the app be sold, so you can't have microtransactions of a free app. That's one of the things we'd like to see changed, and I think it would make this game perform better. A second one is the ability to actually use Facebook Connect to invite your friends, whereas currently it's used to display your friends' profiles, more or less. But those are two things we would love have happen, and you'll see more attention to it from us at that point. Q: So right now you're focusing on iPhone, maybe Android once in awhile, and social networks. A: Yeah, that's right. We're a social gaming company, so I think you've defined us correctly, but I think we focus on experience rather than platforms. You can't just do that tomorrow, but our long-term goal is to talk less about things like iPhone 3GS versus 3G, and more about experiences people want on whatever device they prefer. We are getting close to that. It just so happens that Facebook and other social networks are a great opportunity. They are growing quickly and our games work the best on them. ___ For more videogame news, reviews and features, visit crispygamer.com. ___ (c) 2009, McClatchy-Tribune Information Services. _____ TO SUBSCRIBE TO PLUGGED IN Items in the Plugged In package are not included in your MCT News Service subscription. You can subscribe to the Plugged In package or purchase the items a la carte on MCT Direct at www.mctdirect.com. To subscribe, please call Rick DeChantal at Tribune Media Services at (800) 245-6536 or [email protected]. Outside the United States, call Tribune Media Services International at +1-213-237-7987 or e-mail [email protected]. 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