Game Network Newsletter - November 2011
November , 2011 (Back to archive)
In This Issue:
- Bigpoint - Bigpoint COO, Nils-Holger Henning, discusses the appeal of licensed F2P games, compares that strategy to "owned IP" games, and looks ahead to GDC 2012
- Xsolla - Xsolla VP and co-founder, Albert Donahue, talks about the company's global approach to payment solutions, partnering with Valve and their plans for GDC 2012
- GDC Play "with matchmaking" - a new opportunity for indie's and outsourcers to showcase their games at GDC
 Bigpoint COO, Nils-Holger Henning, discusses the appeal of licensed F2P games, compares that strategy to "owned IP" games, and looks ahead to GDC 2012 |
 Nils-Holger Henning |
Q: Bigpoint has been incredibly successful with licensed F2P games. Battlestar Galactica Online was your biggest launch ever. And I know you plan to come out with several more licensed games in 2012, including Universal Monsters. What is there about licensed F2P games that appeals to gamers?
Nils-Holger Henning: Yes, with more than 6 million registered users, Battlestar Galactica Online is the most successful launch in Bigpoint history.
A film franchise can bring the glamour of Hollywood and its value into the world of games. In return, a game offers the chance for fans to interact with the stars and characters of their most favorite TV series or film. They have an in-depth knowledge about the background story, which offers high potential for an intricate game design. An online game can build on and establish an ongoing connection to the community and draw even more people into the virtual world.
Q: Why are more and more developers getting into licensed F2P content? Is it something that's that necessary to stand out in the crowd of other titles? Or is it because that's where the current funded development opportunities lie?
Henning: Hollywood blockbusters and TV series already have a wide audience, a loyal fanbase, and a strong brand on which developers can build for marketing campaigns. Uniqueness also offers protection – cloning becomes much less worthwhile for competitors who rely on "copycats."
Our motto is to use new technology creatively to put high-quality graphics into browser games, allowing players to experience pure gaming entertainment with millions of other players in real time, online, and free.
One of the reasons why more and more traditional box developers are now starting to shift to the F2P business model based on microtransactions is because F2P is the only way to ensure fair play. As users have the possibility to fully engage into the game without having to pay subscriptions or buy themselves a console and expensive console games, it makes it also easy to broaden the audience.
The business model affects very much how a game is perceived and how many people are going to play it. An example of an IP-driven game that decided to shift towards F2P is Lord of the Rings Online which tripled its revenues since going F2P in September 2010. Also, Age of Conan which was originally subscription-based and which gained 300.000 new players since the switch to an F2P version in June 2011.
Q: Is that something you'd recommend to other developers? Is that strategy better than "owned IP"?
Henning: An owned IP offers opportunities like new user groups, new partnerships, innovative new ideas for games and game design. Bigpoint's strategy of a diversified game portfolio – with core games, casual games, AAA games, games for the whole family, and now also with a focus on mobile game development – is the key to a successful future in online games. Diversification of the portfolio increases profitability through higher revenue streams because of new products that also penetrate new markets.
Bigpoint started with sport games and, later, strategy and adventure games for core gamers – like Seafight and Darkorbit – were the foundation of our global success. Farmerama, Bigpoint's first attempt at conquering the casual and social games market, started out as an experiment in 2009. Today, after only 1-1/2 years, it is one of the most successful online games in this segment with more than 30 million registered users and a growing and very active community. Still, Farmerama is not a "one-hit wonder." ZooMumba, Ramacity, and Skyrama followed to build up Bigpoint's own IPs and add to our diversified games portfolio. Of course, there are challenges in developing a game in an unknown genre but also great opportunities in establishing a whole new line of business.
Q: Bigpoint took home the "Community Choice" prize for Battlestar Galactica Online at this year's Unity Technologies Awards. What do you believe the judges saw in that MMO that was award-winning?
Henning: Battlestar Galactica Online is based on the state-of-the-art Unity 3D technology. We have created a browser-based F2P game that is true to the lore of the franchise, and accessible to both core gamers and fans. Battlestar Galatica Online is easy to get into and gamers can learn quickly how to master the game. The game provides action-based PvP combat that is visually spectacular and engaging even to console gamers, and it supports social community features as well as co-op gameplay for a maximum viral effect.
Q: Bigpoint will have a booth on the expo floor at GDC 2012. Any hints as to what you'll be showcasing to attendees?
Henning: Of course not! We want it to be a big surprise! We are, of course, looking forward to the show and preparations have already started for the event of the year.
 Albert Donahue |
Q: Xsolla is in the business of providing payment solutions for online games and social networks. It seems to me there are quite a few payment solutions around. What does Xsolla offer that your competitors do not?
Albert Donahue: Xsolla has a different kind of business philosophy. We don't consider Xsolla to be a competitor to other companies; we are, in fact, open to working with any payment solution provider worldwide. Because we work exclusively in the gaming industry, we specialize in handling all aspects of in-game payments. This includes micro-transactions, subscriptions, and recurring payments. We have strong analytic data that provides information about players' payment habits.
We work with over 200 payment solution providers worldwide. Publishers choose to work with us because Xsolla offers truly global coverage – we don't just cover the world digitally, but we have local offices all across the world that are able to deal with all aspects of each given region. We understand the unique payment characteristics of each region. For example, in the U.S., credit cards are the preferred payment method for virtual goods while, in Russia, cash is king. Because we specialize in the gaming industry and have global coverage, we are able to help gaming publishers earn the most revenue possible by connecting them with the best possible payment solutions for each region.
Xsolla also provides tax, license, and currency management, as well as handling legal issues for gaming companies wishing to expand into new territories. The beauty of Xsolla is its simplicity – one integration and one agreement is all that's needed to provide an army of specialists worldwide, ready to provide excellent localized service.
Q: I understand that Xsolla has more than 200 payment options that it provides for over 74 countries. That's an amazing number of solutions! How would a developer or publisher be able to wrap his head around all of those and choose one?
Donahue: Xsolla offers all 200 payment options to each and every publisher and developer that partners with us in order to provide multiple payment choices to their players. By having such a range of options available to the end user, we can increase the rate of conversion from players into paying customers.
The majority of transactions in the gaming industry are impulse buys, so the end user needs to be able to quickly find a payment method that works for him or her. The player makes a habit of paying with whatever option he is comfortable using and it is hard to get him to use a new one. Our goal is to make sure all players will be able to find the payment options they feel most comfortable with in every game that Xsolla supports.
Q: Just a few weeks ago, Valve chose Xsolla for monetization of Steam in Russia. That's quite a coup for you folks! What challenges did Valve have in Russia that Xsolla was able to meet?
Donahue: We are delighted to have the chance to help Valve expand into Russia. Xsolla provides coverage for Valve on Russian cash kiosks. We have a team of 25 people that helps connect approximately 450,000 kiosks throughout Russia. This is a challenge because those kiosks are owned not by a few large companies but by approximately 150 small companies. Often a simple phone call just won't solve issues. Our team members are the actual boots on the ground in Russia for Valve, flying to different cities across the region to ensure proper implementation of Steam buttons on every kiosk.
Successful integration with Valve's requirements will show existing and new partners Xsolla's professional approach and ability to handle large projects, as well as how the company is able to deal with challenges. Xsolla's best product is its people. We build a global army that is ready to go to every corner of the world to implement all operations for our partners.
Q: Looking in your crystal ball, what monetization trends do you see in the near future and how can developers prepare to deal with them?
Donahue: I believe the future of the gaming industry is headed towards the free-to-play (F2P) trend we have been seeing lately. The F2P model has shown that giving players the option of when to pay and how much to pay is ideal for increasing revenue. I foresee the F2P model being implemented into console games as well which will bring micro-transactions into every single type of game available. Xsolla's technical capabilities are specifically designed to satisfy F2P and micro-transaction models on every single platform.
Q: You recently signed on as a Platinum Sponsor for GDC's Monetization Track in March and will be having a booth at the show. What convinced you to make the show a part of your marketing strategy?
Donahue: We have exhibited at GDC events over the past few years and have enjoyed great success when we use these conferences as a part of our marketing strategy. We have good relationships with other conference tracks as well, and see our sponsorship at GDC as an indispensable part of our presence in the gaming industry.
Being a global monetization company with powerful analytics and excellent cases at our disposal, we realize that it is necessary to share what we know with the entire industry. As I mentioned earlier, we have a non-competitive philosophy and believe that we all grow when the industry as a whole grows. Our partners will join with us in the Platinum Sponsorship from all sides of the industry – at GDC, we will have publishers, developers, and payment solution providers speaking on topics covering all facets of monetization. We intend to share experiences and insights with the non-standard decisions and unique approaches we have seen in different regions of the world with regards to games.
We look forward to sponsoring GDC and we believe it is the right choice not only for our marketing and for our partners, but we believe that attendees will find the panels and discussions valuable too.
The Game Developers Conference® -- the world's longest running and largest professionals only event dedicated to game development -- introduces GDC Play as a unique opportunity for emerging developers to showcase their games to fellow GDC attendees.
Inspired by the success of the Independent Games Festival Pavilion at GDC, the new initiative will include space in special Pavilions themed around emerging game markets. The program will allow GDC Play exhibitors to display their games to key distributors, publishers, press and investors visiting the conference. GDC Play Pavilions for social & online, smartphone & tablet, and independent games will all located within a dedicated room and include a networking lounge with seating areas for more in-depth meetings.
GDC 2012 will also host an exclusive, invitation-only event to showcase the games at GDC Play. The guest list will include GDC Play exhibitors, sponsors, select publishers and members of the press, investors & other decision makers.
When signing up for GDC Play, which is open to a range of emerging developers showcasing playable games, game creators will be given a standalone kiosk with a monitor, keyboard, speakers and Internet connection, as applicable. This makes it an incredibly simple, low-cost opportunity to exhibit titles to prospective business partners, investors and the press.
GDC Play will also be offering full business matchmaking with a special software solution to registrants - allowing them to request and receive meetings from major publishers, All-Access Pass holders and exhibitors attending the event.
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Paul has covered the videogames industry for over 15 years now, currently writes for Gamasutra.com, and was editor-in-chief of UBM's GamePower.com. He can be reached at phyman@gdmag.com.
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