Player Segmentation Dissuading Convergence in Online Games, Conference Told

SEATTLE -- Game companies looking to draw new audiences by melding features of different game categories should tread carefully, veteran developers told the Penny Arcade Expo over the weekend. It’s still too early to judge whether new “paradigms” can transform the industry, given the recent pedigree of popular category-defining games and Facebook’s wrenching of the game audience from MySpace, they said. Developers shouldn’t even think in terms of casual, social and massively multiplayer online (MMO) game categories, said James Ernest, senior game designer for The Amazing Society, which is developing a trading-card game within an MMO structure.

Before the advent of personal computers, “all games were inherently social,” said Henry Stern, director of design at Zynga, maker of the popular Facebook game FarmVille. Though MMOs “felt like the best way to socialize online” when they debuted in the 1990s, players in far-flung locales didn’t get to know each other, Ernest said. Even FarmVille, which pioneered the farm-game genre and has more than 60 million users, is more like “playing chess by mail” because of the “asynchronous” interactions between users, said Tyler Bielman, game designer at Microsoft.

The hardening of player segments around certain categories makes it difficult for companies to draw new audiences or jump to new platforms, developers said. Making a successful “hardcore strategy game” for a social network is like selling a trading-card game at NASCAR events -- a cultural clash, said Paul Peterson, senior designer at RealNetworks division GameHouse. Facebook offers some good hardcore games but “they just aren’t going to get the broad marketing they need,” as they would for a console, he said. If an independent studio could design a popular hardcore game on Facebook, “it would make my job much easier” at Zynga, Stern said.

"Females in their 40s,” not previously known to enjoy games, fueled the explosion of casual games, Bielman said. The influence exerted by those new players, and the revenue models those games had shown profitable, clearly irked some gamers at the conference. “We're a savvy audience. We know when we're being fleeced,” one gamer told the panel, referring to microtransaction models that let players essentially buy advancement in a game. Stern said varying monetization models offer “different strokes for different folks.” Zynga’s first hit Mafia Wars, in which players can spend as much as they want, isn’t for “MMO purists,” Stern said. Asked whether the U.S. recession may have spurred the growth of microtransactions, developers agreed that companies were discussing how to incorporate microtransactions several years earlier.

Another gamer voiced concern that social game makers were stealing talent from makers of “triple A” games built for consoles, pointing to a recent Zynga hire. Those experienced developers will help transform social games into something more like console games, Stern said: Zynga’s new hit FrontierVille, where players go on “quests,” is a “much bigger step to a real game” than FarmVille, which is best played as a “10-minute break” from something else.

"Cherrypicking” features is more likely than “merging” of casual, social and MMO games in the next few years, Peterson said, pointing to the success of Playdom’s City of Wonder. The first game to take a shot at full-blown convergence, Sony Online Entertainment’s Free Realms, flopped because it required users to visit its website and download software to play, Stern said. Free Realms looks like “focus group world,” Bielman added. “There was no vision except for what the marketing people told them.” The mobile game category is “still in its infancy” because game makers need a system to easily publish game feeds through the device itself, such as an iPhone, and not a mobile application such as Facebook, Stern said.

Rewarding players who recruit their friends to play, or “virality,” was the first feature to make games truly social, and it’s now a basic tenet of most online games, Peterson said: “You need the top of the funnel to be as big as possible” to make money. GameHouse is working on making its casual games “talk back and forth a lot more” to up the revenue, he said. Zynga erred at first by requiring people to sign up friends to advance in Mafia Wars, the first game to successfully use virality, Stern said. “We had a lot of people complain about this,” and when Zynga removed the requirement, the game’s growth actually spiked, he said: “It’s a fine line” between encouraging and annoying users.

Virality is especially important for games dependent on a social network, Stern said: “At the end of the day it really comes down to monetization” and keeping users loyal, rather than “burning through installs.” Facebook’s policy change this spring, reducing the visibility of game notifications in user feeds, cut audiences by up to 30 percent for some games, Bielman said: Game makers are “at the whim of a platform that’s more capricious” than a console maker. Facebook’s dominance in games is recent, though, and could be toppled in two years just as it overtook MySpace, Stern said. For developers willing to play by Facebook’s rules, the payoff can be huge, Peterson said: Social game maker Crowdstar, with 50 million users on Facebook, recently pledged to use Facebook Credits -- and fork over 30 percent of in-game revenue to the platform -- for five years.

Recruitment faces natural obstacles in some formats, such as games targeting pre-teen users barred by Facebook, Ernest said. Microtransactions or subscription revenue make more sense for those games, he said. Stern criticized Blizzard Entertainment’s recent shift to allow a limited number of microtransactions in World of Warcraft, which is dependent on software purchases and monthly subscriptions: Any game that “caps how much your users can show you love” is leaving money on the table. But if players “perceive that money buys you power, they may not participate at all,” Ernest said: Players in Asia have embraced microtransactions far more than U.S. players, creating cultural tensions between gamers. World of Warcraft never would have built its huge player base with a free-to-play model, Peterson said: Game companies must “understand who’s actually paying you and make the game they want."

Game makers increasingly use metrics and data to drive the design and monetization of games, Bielman said. Zynga designers used to have “weeks of arguments” over how to price certain items in games, but the company now tests different price points with small audiences to make that determination, Stern said. Testing is a double-edged sword, because learning what makes more money might also make gameplay worse, Ernest said. That’s why it’s important for designers to focus on keeping users loyal over short-term revenue opportunities, Stern said: “I love it” when testing reveals something “unintuitive,” such as Mafia Wars players prefer finding a “mystery box” with no known value over a prize that shows them statistics.