Facebook, Downloads Called Most ‘Real’ For Games

Facebook’s tweaks to how games are handled, such as removing notifications and taking a 30 percent cut of purchases using Facebook Credits, led to huge drops in traffic to some games and likely killed launches for smaller games, said moderator and Gamezebo President Joel Brodie. But veterans uniformly named the platform “real” for games. “Scale is definitely required in order to get there,” and the changes will mostly hurt small developers, said GameStop President Tony Bartel. A game needs a minimum of 5 million monthly active users to succeed on Facebook now, he estimated. “Perhaps the hype is extending beyond the reality” of late, said Big Fish Games Chairman Paul Thelen.

"We're still very early in it,” said Erik Bethke, product director for Zynga and founder of GoPets, a pioneer in social games. Many game makers grew too fast after Facebook let them in, and the social network “overcorrected,” he said. That said, were he a small developer working out of his apartment, Bethke said he'd be developing games for Facebook, with its low technical hurdles. “The money is obviously there … but it’s hype because we can’t get our sweaty palms on it anymore,” said Arthur Humphrey, founder of Last Day at Work.

The game download market is “predictable, it’s growing fast, and it’s profitable,” said Thelen, contrasting it with high-risk, volatile stocks that investors have fled. Big Fish said on the eve of the conference that it crossed a billion downloads, a first for casual games. Companies including Big Fish have shown that players will still plunk down $20 for a premium game, said Ron Powers, PopCap Games vice president. Improved infrastructure will let download makers stay connected to purchasers through free content and promotions in what had previously been a “completely disconnected product,” he said, calling such interactivity “one of the golden eggs” around the corner. PopCap’s launch of Bejeweled Blitz has been instructive for ongoing customer relationships, he said.

Not all gamers want to be social when playing, and downloads serve that demographic well, Thelen said. Trying to force social elements into every game is “like saying all women want to be Paris Hilton.” The market needs “discoverability” to continue growing, Bartel said. Such visibility for games a few years ago “scared the crap out of me,” Thelen said, because the thought was game makers would steal customers from each other. But download players proved less “viral” as a group, and their reticence to share has slowed growth, he said.

Big brands dominate the iPhone -- only the top 25 games are visible in the App Store -- and its pricing trends make it difficult for indie developers to make a profit, Bethke said: “I can’t imagine why I would invest a lot of time” on iPhone development, unless he had a solid Facebook marketing effort behind it. Bartel said less than a third of iPhone users browse even 10 apps a month, and gaming is the worst-rated feature by users. That’s partly because so many games are cheap: “We need to get away from the 99-cent drug” and focus on premium games with better experiences. Brodie said 7 in 10 iPhone games sell for $1 or less. Thelen blamed the pricing on developers’ desire to make the top 25. But Powers said the iPhone has been a “huge revenue grower” for PopCap. As apps get developed for the iPad and other tablets, premium games will be drawn there and their prices will correspondingly fall, Thelen said. The iPad is “great for porn,” Humphrey said to laughs. “My friends have told me."

Bethke declined to comment on a rumor that Google had invested more than $100 million in Zynga. Speakers generally said Google was too late to the market. “They seem to have been circling casual games for years now,” and had trouble monetizing Android, Humphrey said. There’s not much Google can do to innovate in app stores, despite the 70,000 apps for Android and a pending Chrome store for “Web apps,” Thelen said. Yet with distinct efforts in social, mobile and Chrome, “I have to believe that one of those is going to get knocked out of the park,” Powers said.

Location-based games such as Foursquare were the first category uniformly labeled “hype.” Bethke called location elements a “nice additive thing to a greater game experience,” but insufficient to justify a game’s existence. The audience is too small for location games to go mainstream, Bartel said. “I think it will be involved in more divorces than actual games” as people’s whereabouts are constantly made public, Humphrey said.

FarmVille and similar farm games aren’t defined well enough to become a successful category, notwithstanding the 60 million players on FarmVille, Humphrey said. That game lost a good chunk of its players, around 20 million, in the past few months, Brodie said. “If it’s done right, I'm sure there’s still room to squeeze in a few more” farm games, Humphrey said. Unlike other games, users likely aren’t tending multiple virtual farms or deserting one farm game for another, Thelen said: New entrants are mostly hype. Bethke said the pattern of putting effort into a game and coming back later to see the fruits of one’s work was a good example for the industry.

Veterans gave mixed reviews to motion sensor gaming, as exemplified by the Wii, Microsoft’s Kinect and Sony’s Move. Casual games are mostly “cerebral,” and older players aren’t as adept with handheld controllers as youth, Thelen said. “The social element” of Kinect “literally brings everybody together” in the room to play, and Microsoft has lined up highly social games for Kinect’s debut, Bartel said.

Indie developers have a “short window of opportunity” to make their games into hits, before the costs of development and marketing shoot up, Bartel said: “We can’t just keep having sequel after sequel” from big brands. This is still the best time to be independent, with low barriers to entry, Bethke said. That’s demonstrated by Humphrey’s company: Seven years after churning out several inexpensive hits for the Palm Pilot, Last Day at Work is still thriving, he said. Innovative development is still the “greatest advantage that a small studio has” over bigger competitors. As “easy virality” disappears from game platforms, innovation will become increasing important for games’ survival, Bethke said.