In this session from the San Francisco-based InterPlay Conference, particularly focused on 'social gaming' for networks such as Facebook, a panel including the founding CEOs of Kongregate and Zynga debated the different strategies and business models of their social gaming channels -- floating the possibility that their channels would be interconnected in future.
"Right now, all the attention is on Facebook," opened Martin Green, VP of business development at Meebo. But "things could get better for game developers working on social platforms over the next few years as more platforms like Meebo compete for developer attention. We started out really restrictive for developers, but we've opened up their platform much more since then."
Mark Pincus; CEO and founder of Zynga disagreed: "I believe that's the wrong approach... Facebook did it right, by having lots of freedom for developers at first, and then regulating."
"I think we're saying the same thing," responded Green. "You have to open the floodgates to get attention. We opened up months ago, but were very restrictive. We'll open up more in the months to come."
In turn, Shervin Pishevar; CEO and Co-founder, SGN argued that the "first generation" of Facebook apps were "too viral," with "not enough actual emphasis on fun and longevity."
"I look at Facebook and I see a social operating system. The profile is essentially the desktop. The more the desktop is cluttered, the less utility it has. The idea of challenging developers to create really high-quality experience is the next phase of social game development," he continued, hoping that the future was a move away from creating a high quantity of overly-simplistic games with no depth.
Making Profit and Compensating Developers
Jim Greer, CEO and co-founder of Kongregate moved on tho point out that most relatively unrestricted gaming portals, like Newgrounds, "don't compensate developers in any meaningful way."
"The fact that we actually send our developers checks, they like us a lot," he said. "Most Flash game developers aren't actually making a living from what they're doing; but we have one on their network who is -- Of course, we're not actually profitable yet either. But there are a lot of gaming networks out there you've never seen that have a few games and like 40 AdSense ads on each page. We're trying to stand in contrast to that."
Being profitable, of course, is a difficult task: Greer admitted Kongregate was "just getting started with media buyers" and has to compete with established companies like CNET in the market. "Kongregate has good unique hits and great retention, and looks good by comparison, but I spend 40 minutes a day on Digg, and I don't remember any of the ads. Banner ads aren't very effective, and we know that, and we're working on that."
The social gaming model "has yet to be proven in the ad space," agreed Green.
"If your game isn't any good, if it's not engaging, it doesn't really help it to give it traffic," said Pincus. "Not everyone gets that. Sometimes there'll be third parties who complain that we're not doing enough for them, not giving them enough traffic, when the reality is that they're not contributing traffic back to the network."
"We meter traffic," he continued, "so we guarantee traffic that they have 100 percent return of clicks, then if they have the social bar as well they can get clicks on top of that organically, but if you have a game, we give up to 500 clicks a day even if you don't give back. Eventually, we'll turn them off, so there's that tension. All these channels are good, like being on Facebook is good, if you have something worth bringing to light."
"We've been very open about having competitive games on our network. We don't really mind about having a game that's similar to one of our games," said Pishevar. "It's an open network. But I agree with Mark that we need to push everyone to creating better experiences for players. We need to start seriously talking about connecting our networks, so we create a 100 million player platform. Start working together with the APIs. That can only be good for gamers."
"From a development standpoint, I don't think there's a big deal there," disagreed Pincus. "Working with any of the little game bar things is pretty trivial, so it's not like that needs a standard. But I think it would be cool if in the next six to twelve month there could be a standard for basically some kind of game icons at the top, or feeds. Something where there could be an open way that could have an organic way it worked, and then a paid way."
"The idea would be that you could go to a self-service interface and just buy clicks across the network," he continued, "then whichever provider hosted that click would get whatever percent. Maybe the distributor would get a percent, and whoever was the place the ad was bought. I think it kind of wants to go that way, and I think it will. It's all going the right way, it's just a matter of getting the traffic all aggregated."
Green responded: "There are a couple hundred million of users there from Skype, from the messaging clients - we tend to forget about them. Those synchronous platforms are really interesting for people who might want to play something with lots of their friends, but it's much harder than our asynchronous kinds of games."
"As we do things like microtransactions and synchronous multiplayer play, it's all going to get more difficult," warned Greer. "We know gaming only takes off when there's a standard, like DirectX or OpenGL, because you want your game to definitely work on Windows."
"Or Flash," interjected Pincus.
"I guess I wasn't really talking about development tools," elaborated Pishevar. "I'm talking about something like a universal game feed. It would build this whole level of intelligence about the types of games people like to play, who they like to play against, what optimal skill levels are needed between players to make a challenge. Having a universal feed that connects Kongregate, Zynga, SGN, and everyone else."
"What you describe is super cool and should happen," agreed Pincus, "but right now it violates the TOS on every one of these networks. On Facebook and MySpace, the TOS to their users, and the one we work by, doesn't allow for sharing user data. That's something we should make a strong case to them as a developer community that they should change, that it's in their users' interests."
"Well, you don't have to share personal data," opined Greer. "You share data from your own stuff, like which game is played the most."
"And if that were true, you couldn't even have your own game bar, which shows what games people are playing," added Pishevar.
In the concluding Q&A, the panelists were asked "if you could go back in time one year, what's the one piece of advice would you give yourself?"
Pincus responded "Build in data-driven approach and measurement first, and don't change anything unless you've measured it," before concluding "Don't get committed to any game application or project until it's got traction and is successful. You're not ever half pregnant; you're either ten percent pregnant or a quarter pregnant. Fail faster. Measure first, then fail faster."