With Diane taking a much deserved break, I took on to write on the regular blog post on what we think are going to be the trends in our space for the coming year. Not to put her to shame, I decided to be even more late in delivering this than she usually is. It is also likely to be a different kind of look at the trends, hopefully, it will be equally interesting. If not, come back in a year.

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Kickstarter launched in the UK a bit more than 2 months ago, I wanted to have a look at the initial set of data. That data sample is quite small still, projects usually run for 30 days, so you only really have 2 months and half (kinda – see below) to look at, but still, it seemed interesting to check the early days.

I also want to point out that the data collected was done differently this time. I have gone away from the manual collection of data and now run a fairly simple script to collect my info. This is still limited to successful projects only, but there is no lower limit on the amount those projects have raised as opposed to the $10 000 I had set before (I still think there is a point in excluding the small projects for my purpose in the analysis I am doing, but here, this is very useful). Read the rest of this entry »

While it is still relatively fresh in mind, I want to share about our experience from the Gstar 2012 and what we saw and learned there.

First of all, you can find a summary of the event over at Thisisgame: http://www.thisisgame.com/en/2012/11/19/gstar2012-wrap-up

As highlighted in the article, the most impressive change from last year’s event was the very strong switch to mobile that Korea is operating. So, of course, there were still many online games present, but having probably around 50% of the B2C showfloor taken by mobile publishers was very impressive (and think about it, how much space is usually taken by mobile games at other shows?).

And that’s my biggest take away from this year discussions – Korean developers left that online corner they stayed in for so long and a lot of them moved to mobile. Last year, there was an interest in social games, but this is nothing like it.

There are multiple reasons for that strong change in the developing landscape, but the biggest one mentioned is the stellar (recent) success of Kakaotalk in the game space.

Kakaotalk is an online chat app for mobile (with VOIP as well) that has been very widely adopted in the country. It runs on iOS and Android (and Bada and other OSes that don’t matter much) and many operators bundled it and its adoption is crazy.

In July, they launched their first games (on the Appstore for iOS obviously, and Google Play for Android), including Anypang, a match-3 game, heavily using the Kakao contacts as a social graph (leaderboards and gifting). The game has been *very* successful. They report 10m DAU, in a country of 50m inhabitants (I think users outside of Korea are negligible), and significant revenues (that figure varied a lot depending on who you talked to but it averages around $1m per day).

It has created a lot of attention to the mobile space in general and Kakao in particular – with many studios lining up to integrate with them. It also means that money from investments is quickly leaving the MMO space towards the mobile space.

If you are interested in that market, I recommend you to have a look at the Kakaotalk app: http://www.kakao.com/talk/en

And Dragon Flight, the current game doing very well for them (Google Play link):
https://play.google.com/store/apps/details?id=com.NextFloor.DragonFlightKakao&feature=nav_result
Discussing the Kakaotalk success last week, I was asked why I thought it worked so well, compared to Facebook for instance (or Skype). I think a short answer should be: “Check the app!”.

It is very easy to use, very quick to load and does what it does very well. This is a Dropbox case: service existed before, but was overly bloated (see Skype – I won’t launch the app on my phone, it takes ages to launch, ages to load, difficult to navigate). Kakaotalk also works on every device.

It seems that in Japan, The Line, a similar app, might get the proper momentum and build a similar success and start challenging DeNA and Gree presence. And we might have other apps doing the same in different countries. Whatsapp was mentioned (SEA and Spain), as well as Tango (North America)…

Interesting to see how this will develop…

When discussing with local developers and publishers, I collected a few rough estimates on the mobile market make up. Take those with a grain of salt, but it does help in getting an impression:

In the past year, the mobile OS distribution seems to have completely shifted. Where iOS was the main one a year ago, Android has taken over (through Samsung devices mostly but not exclusively). I was told 89% Android, 10% iOS, 1% margin of error for others – it is probably exaggerated but it highlights the current trend.
Another change, the carrier Android app stores have lost lots of market share, with Google Play being currently the main App store (about 50%), followed by Tstore – the android app store of SK Telecom (30%), Apple App Store (10%), and Others completing the count.
That change seems to have happened through users getting educated about the ecosystems (and not liking being tied to their carrier for their apps) as well as Kakaotalk pushing all its android distribution and payments through Google Play.
One last bit of relevant info: I was told that there was close to no piracy on Android in Korea.

Like every year, going to Gstar was a very good experience. We had excellent meetings, we were able to have a peek at trends from a very different territory and we met with local industry people that we don’t have the opportunity to catch up with at other events.

Since last June and my blog post on Kickstarter, I haven’t really moved on. I am still quite obsessed with it and its evolution.

I have run the same numbers (same methodology) as last time and made a short presentation under the same format to see where it was going. You can find it below: Read the rest of this entry »

Perhaps, like us, you’ve noticed that since the Double Fine Adventure Kickstarter campaign, the crowd funding platform has gained a lot of momentum in the games industry.

New success stories emerge regularly, and there are now 10 games successfully funded that way beyond $500,000. Not a small feat!

We’ve been working on a Kickstarter project with a client, and as this progressed I grew very concerned that the popular perception of Kickstarter = success is not complete, and that anyone thinking of funding their project this way should look at it very closely before going there and asking for hundreds of thousands of dollars. There aren’t a lot of data points to check, so we decided to do some research to understand the platform and its current capacity better. Read the rest of this entry »

I am massively late in writing this post, and apologize to our blog readers as we didn’t have much time to blog in the last months. Like in previous years, I will try to outline what I see as the biggest trends for online games for 2012.

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Last week in Seattle, the IGDA put together its first Summits. The event was organised parallel to (and in partnership with) Casual Connect. I was drafted to help put together the content for the Monetisation summit, and sat in a few sessions that were particularly interesting to me (one perk of having a say on what the topics will be!).

If you missed some of my comments on twitter, or more likely if you just unfollowed me after the spam (you can follow me again, the event is over, I will behave in the coming weeks), I have put together here some of my notes on the Fighting Fraud panel and the Kickstarter panel.

These are my rough notes of what was discussed. If I got anything wrong, please let me know.

Fighting Fraud Panel

Moderator Sanjay SARATHI (Vindicia)

Panelists Robin WALKER (Valve), Arthur CHU (Nexon), Michael LIBERTY (Paypal)

The panel objective was to educate on what you can do to fight fraud, and it was aimed an audience with limited knowledge on the subject. Here are the key take aways for me:

Fraud is painful. Fraud is difficult to fight. Fraudsters will always be very creative in bypassing your system, and you will always have to play catch up. But you really can’t ignore it. Before anything else, the first thing to do is to make sure you can measure fraud and understand that it is happening. The moment you reach about 2% of chargebacks on your transactions (stolen credit cards were used and the money is taken back), Arthur CHU estimated you have about 2 months before it becomes a LOT more painful. However, before you reach that stage, investing heavily in fraud fighting might not be necessary.

One fight at a time. Michael LIBERTY made a very good point on the fact that if you are not a big company and you are starting to charge online, it is best to go through a payment management system like Paypal (Michael’s company, to be fair). Until you reach a certain scale, micro-managing the payment processors and the related fraud is too time consuming.

Game features influence fraud. Robin WALKER pointed out that a game with a trading system was more likely to attract fraudsters. While he has a fair point, this won’t remove all fraud and it does take a serious chunk of the social features (Arthur CHU made this point in the panel very eloquently). What it emphasized was the fact  that the game design can help control fraud to a certain level: limited trial accounts, high level items “soulbound”, Gold lock systems (as in Rift). Convincing the developers to develop them is the hardest part.

Measure, measure, measure. Beyond measuring the fraud itself, it is also important to measure the game features that fraudsters use and abuse. To be able to fight fraud requires understanding what they do and how they do it. Leading to:

A tool is only as useful as the person holding it. All panelists agreed that going out and buying fraud fighting tools is useless unless you already know how you want to use them. These tools can be very efficient (for Nexon, it led to a reduction of fraud by a factor of 10), but they need to be used properly in your context. There are two kind of  tools specifically that were mentioned: geo-location and device reputation tools.

Understand friendly fraud from criminal fraud. All games have a number of “friendly fraud”, the typical case being kids using their parents’ credit cards without their approval. The panel recommended to, again, check the users’ activity, in order to identify friendly fraud and also to have a clear policy in place to manage it. Valve is calling really big spenders, for instance, to make sure they are aware and intended to make large purchases. Michael LIBERTY recommended kids’ games specifically to have a “generous” policy, as they were more likely to see kid-driven friendly fraud.

Current trends. Arthur CHU was very vocal about the increase of the number of account takeovers, and how fraudsters are getting more and more sophisticated in their attacks. Where they once launched blanket attacks to get as many accounts as possible, they now target accounts that they know are very valuable.

Kickstarter Panel

Moderator Cindy AU (Kickstarter)

Panelists Alex NICHIPORCHIK (tinyBuild Games), Wiley WIGGINS (Karakasa Games), Colleen MACKLIN (Local No. 12)

Kickstarter is the most prominent crowd funding website at the moment, and has been used by a number of game studios. The panel highlighted three case studies from companies that have successfully raised money through the service. Cindy AU provided very interesting information as well. I have linked the project for each panelist above, with their company name. So, some takeaways:

Kickstarter data. The website has successfully raised $70m across 20,000 projects to date. IIRC, the biggest project they had was a movie that raised about $500K. After submission, Kickstarter takes about 24h to greenlight a project. Once greenlit, the company can publish the project on the site when they want.

Best practices. Cindy AU gave 3 core rules to maximize your chances with your project.

Rule #1 – Make a video. The web is very much about videos nowadays, and projects with good videos are the ones that are the most successful. It doesn’t need to be super professional, but it certainly needs to clearly describe the project.

Rule #2 – Rewards are very important. Each project offers unique rewards based on the size of your pledge, and it is up to the project owner to define them. Unique, tangible rewards with a strong cool factor help their projects significantly.

Rule #3 – Leverage your existing community. If your project already has an existing community you can leverage to contribute to it, and also to spread the word, this increases the likelihood that your project will succeed. Cindy mentioned that projects with more than three backers succeed 90% of the time.

The panel made very interesting comments on the importance of designing your rewards thoughtfully. Wiley WIGGINS regretted offering a poster reward, because they didn’t calculate properly the cost and the pain of delivering them to their backers. Kickstarter doesn’t get involved in the design of rewards, and it is really up to the company to do its homework as far as costs are concerned. Reward design is very important.

Another consensus was that the duration of the pledge, the length of time allowed to reach the project’s target, didn’t need to be long. The logic is that your early backers will reach it in the first few days anyway, and then progress will be slow and regular until the very end when lurkers may decide to chip in and help.

It was also interesting to note that the Kickstarter system attracted whales in the same way. Thunderbeam offered to make $1,000 contributors their ‘best friend’, which they essentially added just for fun. They now have many new best friends.

I learned quite a bit from these panels, and will definitely be keeping an eye on Kickstarter – I hope they find a way to accept non-US projects down the line.

A couple of weeks ago, following the E3 trade show in Los Angeles, Kogi Tagushi, Senior Executive Officer at Square-Enix, declared he was “humiliated by the decline of Japanese titles”. Now, Mr Tagushi was mainly talking about the poor representation of Japan at the show in terms of new games and IPs, however the decline of the Japanese games industry has been a popular topic of discussion recently, and a second interpretation can be seen of this, relative to two large Japanese game companies that seen to be willingly putting on a blindfold and driving as fast as they can against a wall, namely Sony and Nintendo.

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A few weeks ago, Thomas and I attended the Nordic Game Conference in Malmö, Sweden. Although most of our time was spent meeting with representatives of the very impressive Scandinavian game development industry, we had a chance to see some of the talks, and came back with a few thoughts on current trends in the online games business.

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As a follow-up from my previous blog post, intentionally quite theoretical, I thought I would give two very specific examples of what I consider good development to push the service side of a game.

While a lot can be done to improve the quality of the service of a game, I really believe that it is when a company is dedicating its most precious resource (developers) on pushing the level of the service quality that you know it has a genuine will to develop a service strategy. More than, say, opening a dedicated Customer Support department with hundreds of dedicated staff and limit the developers to only build new content and gameplay features.

It may be biased by my own personal experience, but I have seen a bit too often CS departments used as a stop gap for development shortcomings. It is too common to see a bug left unfixed by the development team, that would require a couple of days of an engineer’s time at worst, to have hundreds of hours of CS staff spent hotfixing the issue. But I digress.

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