New Social Media Company Portalarium Eyes iPhone, Consoles

It’s “too early to say” when its games will be offered on home consoles or handheld videogame platforms, said Garriott, a game industry veteran best known for creating the Ultima fantasy role-playing games and Ultima Online, widely viewed as the first successful massively multiplayer online game (MMOG). It’s also too soon to say which console platforms Portalarium’s games will appear on, said Garriott, who’s vice president and creative director of the new company. But he said the company will stress platforms with strong online sides.

The company said its first product is a cross-platform Web browser plug-in, the Portalarium Player, which allows games to be developed on “a wide variety of game engines and technologies -- not just the pervasive Flash platform -- to run seamlessly inside of the major popular social networks.” The plug-in is in limited beta testing as a Windows PC application on Facebook only. The social network is running the company’s first published game, the Texas hold ‘em card game Sweet @$! Poker. But the plug-in “already supports all major Internet browsers and is also in development to run within MySpace and other social media networks, as well as on Macintosh and on mobile devices such as iPhone and Android,” the company said. The beta started about a month ago and an official launch will follow in “a month or so,” Garriott told us.

Garriott called social networking games “the next great wave” of the game industry. They're “easy to share,” “easy to play,” requiring “virtually no” downloading, installing or tutorials to start, and allow people to start playing at no charge, he said. The developer can then “try to monetize the experience,” Garriott said. “Each of our games will have to have a different way to be monetized. In the case of our poker game, you get free chips regularly, free chips for bringing in your friends, free chips for sharing it in various ways.” Players who like the game will also pay for additional virtual chips, he predicted. Other games that Portalarium publishes, including role-playing games “will probably have different methods of monetization,” he said.

Although social games have grown fast, they're looked down on by some traditional game developers, partly because most don’t use very sophisticated graphics, Garriott said. He compared developers’ response to social games to the one at first to MMOGs. When Garriott was developing Ultima Online, “there were no massively multiplayer online games that were successful, and so when I was first pitching to get that game done it was very hard to get corporate support for getting that game built,” he said. When the game launched, the game media “all pooh-poohed it because … it had relatively primitive-looking graphics and user interface compared to mainstream games,” he said. But the game became a huge hit, and online games have become a significant growth category the past 10 years, he said.

"Now we're at the dawn of social media and these much more mass-market consumer products” in the gaming business, Garriott said. “Again we're at the stage where traditional media and traditional developers” are looking down on a genre and complaining the graphics are primitive, so they're either “ignoring it or don’t understand it,” he said. But the most popular social-media games “have 10 to 100 times more players than even World of Warcraft, and the money flow going through social media for the top 10 social media games, I think, are all bigger than the top 10 of all other games,” he said. They “don’t understand what a revolution this is going to mean for all gaming,” he said. He advised developers not yet in social gaming to “get off their high horses."

Part of the reason that most social-network games look so primitive is that many traditional game developers aren’t making games of this kind, Garriott said. He talked up what he called the superior look of Portalarium’s poker game compared with many social games. A demo he gave indicated that the game does have richer graphics than typical social titles.

One of the major draws of social network games is that gamers get to play their real-life friends, unlike the random strangers that gamers typically face with other online games, Garriott said, echoing what Brian Reynolds, the chief game designer at Zynga Game Network, said earlier at the conference.

Portalarium plans to publish two to four of its own games a year and the same number from third-party developers, Garriott told us. It’s too early to provide specifics on future games, he said, but the company intends to develop titles similar to those now popular on social-game networks, but with better graphics -- and the kinds of games that Garriott is passionate about, possibly including social versions of old game properties he developed and still owns rights to.

Earlier, Zynga’s Reynolds cautioned that developers looking to make social network versions of games from other platforms shouldn’t “just try to port a traditional game,” saying “you have to get it social before you can do anything else.” For example, he said, when Zynga tested “boss fights,” in which a player is challenged by an enemy, the company learned the importance of making it simple to implement and keeping it very social.

Zynga welcomes the competition from Portalarium and others and isn’t surprised by the increased number of companies, including “big players,” entering the social game network space given the rapid growth, Reynolds told us. He predicted that some newcomers will succeed although “there are a lot of ways to go wrong” in entering the category. Zynga got in early and “learned lessons early,” he said.

Graphics in social games are already improving, spurred by a “revolution towards Flash games,” Reynolds said. There’s been “a gradual improvement in technology” that he predicted will continue, but he cautioned that improving graphics too quickly could backfire because of the additional load time that could be involved. “There is a very low initial investment on the part of players,” and it’s “very risky” to start requiring downloads of plug-ins before a game can be played, he said. Zynga is “delivering all we can” now with “a two-second load time,” he said. The company “will continue to ride” with what players will tolerate, he said.

FarmVille was built in five weeks and now has 31 million active users daily, Reynolds said. About 10-20 developers worked on the game, depending on the week, he told us. He said it typically costs only about $100,000 to $300,000 to make a social game and takes 4-12 weeks to make it, versus the $10-40 million or more and 2-4 years for traditional games. The typical participant in Zynga’s games actively plays two titles, Reynolds said. That’s underscored by Zynga’s data showing that it had about 35 million active users monthly and about the same number of unique users a year ago, he said. But the total has grown to about 235 million monthly active users, about half unique monthly users, Reynolds said. Zynga is in no hurry to launch multiple new games each year, preferring instead to focus on improvements in titles that are still popular, he told us. When games keep doing well, the company intends to have “substantial support behind them in terms of game development,” he said. Zynga will “do new projects here and there,” he said.

"The core of the social gaming industry now is Facebook,” said Reynolds. Facebook accounts for “a substantial number” of the people playing Zynga’s games, he said, but the company is “agnostic to platform” and already has its games on other platforms, including MySpace and the iPhone. Mafia Wars has fared especially well on MySpace, he said. Any platform that’s based on social connectivity “is a platform we're really interested in,” he said.

Asked whether Zynga expects to bring its games to videogame consoles, Reynolds said, “I don’t think so” but quickly added, “Never say never.” The recent addition of Facebook to Xbox Live “could be the kind of road that takes us in that direction,” he said. Reynolds said he doesn’t know how many Xbox Live Gold members are accessing Facebook.

D.I.C.E. Summit Notebook…

The game industry faces tough challenges, but “the reality is we're just in a transition” and “we've been here before,” said Electronic Arts Chief Operating Officer John Schappert at the Summit: “The roof is not caving in.” The transition is a little “tougher than the ones we've been through,” partly because there are more platforms, Schappert acknowledged. And consumers are “being extremely price conscious with their money” and “selective” in the games they buy, he said. The 20 highest-selling games of the holiday season captured about half the game revenue, the top 10 games accounted for 36 percent and the top five 27 percent, Schappert said. But, he said, there are “more opportunities than we've ever had before.” He offered five tips for the next three years. Game companies need to make a “commitment to quality,” get more from their marketing dollars, invest in the future by getting online for the revenue streams available there, and not abandon their consumer base or “let the cynics get you down.” All the marketing in the world won’t help sell “questionable” games, he said, showing a slide of games including EA’s Catwoman. On the other side of the coin, he said, “I don’t think we gave” the original EA games Mirror’s Edge and Dead Space “the marketing support they deserved.” They needed additional backing especially because they were released into a crowded field of games during the 2008 holiday season, he said. Schappert also cautioned that NPD sales data aren’t “indicative of our entire industry” because the firm doesn’t get data directly from mass merchants and doesn’t take into account online sales and sales outside the U.S. There are also no clear measurements yet for sales of games on the iPhone and other mobile devices, he said. Schappert is a “big supporter” of social gaming but cautioned that “this industry is destined for consolidation.” He compared what’s happening in that business with what happened in mobile gaming. Game makers should support all the growing platforms and online opportunities, he said, but “don’t jump out of the shiny disc space just yet.”

Real-time entertainment traffic has exploded, accounting for about 16.6 percent of total Internet traffic, up from 12.6 percent in 2008, OnLive CEO Steve Perlman said, citing Sandvine data. That’s one reason OnLive’s cloud-based game service is what the market is demanding now, he said. He demonstrated the new beta version of the service, again claiming that it will offer a more profitable alternative for game makers, eliminating piracy and used games while removing various middlemen, including retailers, from the equation and boosting margins. He cautioned that the growth of faster broadband could increase the risk of online piracy of content. “Hundreds of thousands of people” have signed up for the OnLive beta to date, he said. Perlman didn’t say when the service will officially launch, noting only that the company will “have some things to announce soon.” OnLive also hasn’t announced pricing for the service or the MicroConsole device that hooks up to a TV and is required to use the service.