Author: by Tom Kim, Staff

In this exclusive Q&A, we present the full text of our previous Gamasutra Podcast interview with Andrew Pedersen, vice president of Electronic Arts' casual games portal Pogo.com. In the course of our conversation, we discuss the importance of community to Pogo, its recently announced partnership with NBC Universal's iVillage, bringing the Pogo brand to the console space, and casual gaming in general. What are some features that differentiate Pogo.com from your competitors, such as Yahoo! Games, Viacom's NeoPets, and PopCap? Andrew Pedersen: The thing that really sets Pogo apart from all of the competition in the casual game space is the seamless blending of unique game experiences with strong community features. We're really the only site in which virtually every game we offer is wrapped with these community tools. We have chat, tokens, a prize system, avatars, and badges -- all of these things are seamlessly integrated into the game experience, and I think that's what really separates Pogo from the competition. When you come there, you don't play one game one way and then jump into another one with a different set of features. It really is one holistic experience. Could you talk a little more about those holistic features and how they figure into encouraging people to stay on the site, and play across different games? AP: A lot of the key features on the community side are designed to facilitate the building of social connections between our players. We know that most people come to the site to play the games, but secondarily they discover that there's a vibrant community there that they have a lot in common with, because they're all playing games. Chat is obviously a very important feature because it makes people feel like there are others who are playing the game, and they have a shared experience. That, first and foremost, is the most powerful feature, and that permeates virtually every game we have on the site. Additionally, we have tokens, which act as a universal points system that spans all of our games. As you play Pogo games, you're accumulating these tokens, which equate more to status. They were originally designed as a gateway into the prize program, but what really happens is people will accumulate these tokens, and they become a status symbol for them. People will use that as a way of identifying people who have similar interests or who have been on the service for a certain length of time. It's very powerful, and players know they can go into virtually any game and they can accumulate these tokens. Additionally, on the Club Pogo side -- which is our subscription service -- we pioneered badges, or challenges into the casual gamespace. One of the things that does from a social component is that it provides a directed experience. When you have so many games on a site or service, sometimes it's difficult for people to figure out what game they want to play. With the challenges, it drives people into certain games. It also creates a shared experience, because other people are going into that game as well, and they're all competing to see who can complete the challenge. But it's also not a "winner take all" situation -- everybody wins, and that's very important to Pogo. When did the transition occur when you discovered that was a strong driver in and of itself for the community? AP: For people who are new to the site, we look at how long they've been a registered player at Pogo. During the first few months, what we find is that people who accumulate tokens are investing those in the prize program for a chance to win money. But as they become more savvy and realize that their odds of winning are fairly steep, and as they look at other people who have accumulated a lot of tokens, they make this shift away from using it to win prizes and more for status. That seems similar to Xbox Live's Gamerpoints system. AP: Tokens have been around since Pogo started in 1999, so that was something Pogo pioneered, along with the integration of casual games with prizes. That was another thing that really separated Pogo from the competition early on. The badges that we had launched on Club Pogo are similar in design to Achievements on Microsoft's Xbox Live Arcade. We came out with them first in 2003 when we launched Club Pogo, but we didn't know we had something so compelling that we were going to start building a service around this new game dynamic. Pogo is known for its appeal to the casual games market, but it seems as though there's more segmentation to your users than would seem to be encapsulated by that term. AP: It's true. I mean, I think "casual games" really is a misnomer, and there really isn't anything "casual" about them in terms of the players. The games themselves are really designed to be short session experiences that are very easily accessible, and that is really akin to being a mass market experience. In terms of the core gamer demographic that we're really going after, we see that we're not specifically targeting women, which I think is what everybody sees as being the primary demographic. What we're trying to do is create a mass market product that will appeal to the broadest demographic possible. That's not to say that it's coincidental that it resonates with women, but I think it is the driving segment of the market, and we want to make sure that we design products that will appeal to them. I think we try to avoid experiences that we know are not going to resonate with that audience, rather than designing products specifically for women. So you have a co-branded games channel with iVillage that's apparently offering some of your preexisting content such as Poppit!, First Class Solitaire, and Word Whomp. They have proven to be, in your words, "A favorite among female gamers." Are you going to leverage that iVillage co-branded site in ways that go beyond offering games that seem to appeal to women? AP: The way the relationship is structured is that all of the content that we offer on Pogo will be available to the iVillage userbase. We see a lot of overlap in the core demographic on Pogo with the core demographic that is on iVillage. There's obvious synergies there. We're going to continue to build the kind of content that we think is going to resonate with the casual games audience, with the expectation that it will resonate with the iVillage customer base. Even though they do skew very female, it's still a fairly broad demographic. The casual games sector, as you've noted, is growing to a healthy degree. But there's some difficulty there, because those numbers reflect largely new entrance into the sector. In mobile phone parlance, these are known as RGUs: revenue generating units. But the issue that a lot of people are interested in is how to effectively monetize that space, because largely in that space, people aren't used to paying a lot of money for their content. They expect it for free, or for a very low cost. To extend the analogy, how do you plan to extend your average revenue per user? AP: The way for us to ultimately be successful in this space is that we want to maximize the amount of traffic that comes to Pogo.com. We have the luxury of having multiple tiers of service, and that really enables us to more effectively monetize our audience than any of our competitors. We have over ten different revenue streams that come into Pogo from various parts of our business. Starting with free, that's fifteen million people that are coming to Pogo every month, and we monetize them primarily through advertising. As the players become more loyal, they start moving upstream into our premium services -- Club Pogo, or our downloadable offerings. We more effectively monetize those users, and ultimately, they become referred to as a "loyal Pogo player," and they start purchasing additional premium items that we have on the service, like premium badge albums, or through microtransactions with our gems currency. Those users will consume a lot of that premium content, so we're able to effectively monetize our user at every one of these tiers. But the main thing is that our users don't necessarily feel like they're being nickeled and dimed as they move through this progression. They can have a great experience if they just want to play on the free service. If they move to Club Pogo, they don't have to purchase premium badge albums or enhanced avatar features. It's more of a luxury, and if they choose to do it, they're going to enhance their experience. We feel that's a really important philosophy to follow, in order to retain those users and effectively monetize them. Do you feel that the rest of EA might be learning from your model and applying it to their efforts on, for example, the Xbox Live Marketplace? AP: One of the interesting things about Pogo is that while it's not one of the most technologically advanced kind of gaming there is, we are able to pioneer new business models and try things because we don't necessarily have the same high-profile licenses or encumbrances that the rest of EA has. I think there is a lot of learning that the core part of EA can take from Pogo, and I think that you will see more and more investment in the online space from the core part of EA. Can you give me some idea of a breakdown between say, your free users versus your premium service users, in terms of numbers and subscribers? AP: We have about fifteen million unique players that are coming to Pogo every month. Of those players, we have approximately 1.4 million paid subscribers who are paying us either monthly or annually on the Club Pogo side. Of that 1.4 million people that are paying, we have a high percentage of those who are participating in our premium offerings, as a way to enhance their experience. Can you say anything about how the growth has been in that sector, year upon year? AP: I can't, other than to say that we see a very healthy trajectory for all facets of our business, and I think we're in a very exciting time in terms of explosive growth and interest in casual games. I think Pogo is really well positioned to continue its leadership position. At the same time, you've got a lot more competition than you did before. You alluded to it earlier with some of the mechanisms you've got to maintain, and the loyalty of your existing customer base. But is there anything you're doing in particular to grow your audience, to get more of those RGUs? AP: Sure. Part of it is the relationship we have with iVillage now. It's a way for us to bring in and expose new players to the Pogo fold, and ultimately find ways in which we can keep them engaged and ultimately move them through our progression. We're also looking at ways in which we can create new features that we think are really going to resonate with the audience, so that we keep our retention numbers up, and so that as our competition increases and people start bringing similar features and content, it's important that we maintain a leadership position in terms of continuing to innovate, whether it's with new games, new features, or with bringing in a new segment of the audience to Pogo. All of those things are very important ingredients to our long-term success. It was somewhat implied that not all of those are technical solutions, meaning that not all of them have to do with the size of the executables or the robustness of the games. Are they more about your service itself? AP: Absolutely. We're making a lot of investments around stability in customer satisfaction, because what we find is as the competition increases, the areas of deficiency you have on your site become magnified. There are problems that can spread through the community like wildfire, so it's important that we maintain very high levels of customer satisfaction, so that if there's anything being spread around Pogo, it's about the positive experience rather than the negatives. That said, I noticed that recently you've been getting into downloadable executable files. Interestingly, they still have links back to your regular casual network, and still have links to those mechanisms that you have built your services upon. How important do you think downloadable executables are to your core market of casual gamers? AP: We believe that the downloadable market is a very robust and exciting one, and there's lots of innovation. But really what we've found is that when people play downloadables, they will go and try and sample the experience. They download it, and they leave. We're trying to solve that with our connected downloadables, so that's a new genre that we're putting forth. What we want to do is to maintain that relationship with the player who has purchased a downloadable product, and keep them engaged in the community. What we've found is that those community features really help the retention, but they also help the conversion of those downloadable products. The people who have already purchased the product who are in the rooms playing the games become surrogate salespeople, and they really help boost your conversion. It adds a lot of differentiation to the experience, as well as being very helpful from a business perspective. There's an increasing popularity in alternate distribution channels on consoles, such as through Xbox Live, the PlayStation 3's online service, and the Wii's Shop Channel. Have you considered having a Pogo channel on these consoles and services? AP: It's something that we look at very carefully. We have a philosophy that we want to have Pogo present everywhere casual games are sold. We're making concerted effort to put Pogo in places where we believe it can be successful and resonate. We're not going to overinvest, and we're not going to be in a position where we're going to invest millions of dollars into something that is unproven. We're going to take a calculated approach. We'll be rolling out our first Xbox Live title sometime in the not too distant future. It depends on when Microsoft decides they want to ship it. It's called Boom Boom Rocket. It's a casual game that was designed by the Pogo studio and developed by Bizarre Creations, who did Geometry Wars. It's a rhythm game with a fireworks theme. What we did was to try and take the design philosophy that has made Pogo games so special, but tailor the game to the core console demographic. I think what you're going to find is a very exciting and compelling experience. We're going to take a look at how the audience responds to that, and how successful that investment was. If it is successful, we'll continue to invest in those areas. We're also putting out a Nintendo DS product titled Pogo Island. That should be releasing at the end of March. It's a compilation of five Pogo games with a wrapper of an island theme that has a boardgame metaphor to stretch out the experience. We're very excited to see how that will resonate with the non-traditional casual game player. Those are, of course, a little outside the normal realm of the Pogo community and your Pogo stable. Do you have any plans to tie the Xbox Live Marketplace sector to your traditional network, and maintain that retention you were talking about with your existing market? AP: It's something that we're looking at very carefully. Again, what we don't want to do is invest too much before we have any real-world market experience. The first title that we're going to be coming out with will take advantage of all of Microsoft's retention features. We'll look and see how those are utilized and decide if there is an approach we can take that will ultimately provide a lot of that connection back to Pogo. But that has to be something that is done in concert with Microsoft. Do you feel that the Pogo brand is eclipsed somewhat by the EA brand? I've heard of Boom Boom Rocket before, and I know it's tied to Bizarre Creations and EA, but I wasn't aware of the tie to Pogo. Do you have any sensitivity about that? AP: We want to make sure that the title actually is connected to Pogo, but it's also important that we leverage the credibility that EA has with the core console gamer. We really wanted to make sure it was under the EA brand. Obviously, Pogo is a division of EA, so it's appropriate to do that. We wanted to leverage the credibility that EA has with the console player, but we also wanted to push Pogo more into the limelight so that people can understand the kind of experiences that we have to offer. Is there anything new or in the pipeline that you'd like to talk about? AP: Fairy Godmother Tycoon is the newest game that's going to be coming out. It's a downloadable product, but a standalone experience. We're very excited about it. It really puts a twist on your traditional "tycoon" games. It has the Pogo tongue-in-cheek sense of humor, and I think that it's really going to find an audience on Pogo and outside the core Pogo network. We're very excited about that, and I believe it's going to be shipping tomorrow. Pogo releases between twenty and thirty new products every year, so there's tons of stuff that's coming. I encourage you and your wife and the Gamasutra fanbase to come to Pogo.com and check it out!