What's the next great platform in gaming, and what role will casual games play? At the 2008 CES, Sierra Online president Ed Zobrist, David Laux, global executive for IBM games and interactive entertainment, Qualcomm gaming group senior product manager Son Ton, Glu Mobile marketing vice president Justin Kubiak, Michael Rasmussen, director of Business Development Off-PC Games for RealNetworks, and WildTangent CEO Alex St. John discussed these issues in a panel moderated by Intel Capital director of strategic investments Alexander Marquez, hoping to answer these questions and more.
Casual gaming is now clearly more than a fad or a movement -- it's here to stay, and companies are thoroughly exploring this entirely new demographic of gamers. And the format's rise to industry presence has created a slate of issues unique to casual gaming -- how will it be monetized? What role will community elements play? How will users access that content, and how will it integrate with the broader sphere of entertainment media?
The Casual Demographic
Sierra Online's Zobrist prefers to look at casual games as adjacent to the core market. He prefers to call them "short session games," but also expressed an interest in recruiting casual gamers to core games. "People will find you on their own or by world of mouth," he said.
Whether it's short session, mid-session or long session play, IBM Games' Laux feels the defining trait is instant enjoyment. "We see that it has to be naturally intuitive," he stressed -- for example, having all the controls on single screen, and having simple rules and mechanics that can be explained to new players in only a few seconds.
Said Qualcomm's Ton, "We're core gamers who took time off to raise our kids, and now we can play casual games with our young kids, because many are very visual -- there are lots of pictures and it's easy for them to pick up."
Kubiak noted that Laux's definition of the casual game is actually required on the mobile platform. "Even though people may play for an extended time, it needs those properties," he said. "With mobile, we have a similar experience to box sales, as we have to sell the game to the carrier, so we need marketing and brands more."
WildTangent's St. John joked, "Casual gamers are between 60 and 70 years old, have 7 cats, and play Bejeweled
while waiting for their grandchildren to call. But seriously, it's all about different distribution. When TV came out, it wasn't "casual movie watching." It's all about the electronic distribution."
He continued, "When you buy a core game in a box, you've got an implied promise of quality and depth up front. For casual games, people are surfing around and quick-sampling, versus waiting four years for the next Halo
. It's much more like surfing to find a TV program you're interested in. Casual has its own marketing and distribution built in."
Business Models: Investing In The Online Game Space
Monetizing the online games space continues to be a prevailing issue. Does a large casual game audience really translate to more purchasing power? St. John isn't so sure, and commented on WildTangent's experience: "We make 50 percent [of our revenue] from the 1-2 percent who pay with credit cards. There's a huge amount of play -- but little purchase."
St. John favors monetizing via advertising for premium content. "If the average user paid $60 for the game, what's the mobile price? How many times did they play it? They don't know," he pointed out, adding, "the free audience of games is 50-100 percent larger than paid. As soon as you understand that, you can make more money distributing for free. The average advertiser pays $150 CPM for the ad that monetizes the game. You leave half the money on the table without ads."
He also believes in the viability of microtransactions, commenting, "It's two to three times better revenue to monetize via tokens, versus straight purchase."
Moreover, St. John believes companies should look overseas for the next big business model. "You will soon see MMOs dominate the casual space in the U.S. through ads," he predicted. "Asia and Europe have shown us that MMOs are stickier and more viral, and will likely dominate the US casual space in the next few years."
In fact, Zobrist added, "In Asia, there's no retail business at all. It's all item-based and microtransactions.'
Laux commented on a few of the examples already in practice in regions outside the U.S. "The Asian marketplace allows you to buy one debit card and access multiple sites with it," he pointed out. "The Indian marketplace is cell-phone based, and transactions cost 2 and a half to 12 cents."
Does Casual Equal Community?
While Zobrist feels that community play is stronger outside the U.S., where single-player is more prevalent, St. John feels that interactivity, more than community, is the key issue. "'Community,' like 'casual,' is one of those words losing meaning," he opined. "The issue is interactivity, and interactivity includes chatting."
MySpace And Facebook: The Next Frontier For Games?
Said Laux, "Facebook functions as an individual portal. It represents a way to raise awareness about games, versus a place where gaming will live. It will have a short window of success."
Zobrist suggested that social platforms might help make games more visible or viral, and Rasmussen agreed. "All my teenage daughter does online is Facebook," he pointed out. "I think you'll see those demographics change."
So what is the next big platform? Though the panelists agreed that much of it will be determined by the evolving needs of the audience, and a settling-out of the demographic that remains to be seen, Zobrist has an idea. "Ultimately, we'll see this move to television," he suggested. "That's what we'll see the market move to. People want to sit around the TV and play games as a family."