How Playfish Baits the Hook on Facebook
Social gaming is in its infancy. While console makers are trying to figure out what "social gaming" means beyond playing together with friends in your living room or across a vast worldwide network, other companies are creating powerful products on Facebook and MySpace that cost very little to make and operate, and have the potential of reaching millions of users without spending a single advertising dollar.
If you have a Facebook account, you have probably read an endless stream of status updates from your friends about the things they are doing in Mafia Wars, FarmVille, Pet Society and more. And as overwhelming as that can be, it shows the viral nature of these games -- while not everyone on Facebook may be playing, chances are, at least one person you know is.
Smart companies know the score: Facebook has the potential to be as hot a platform as the iPhone. One such company at the forefront of this is Playfish, founded by four former executives of Glu Mobile. Recently Crispy Gamer had the opportunity to talk at length with John Earner, Vice President of Product Management at Playfish, about the business of social gaming, the company's games and how this company is at the forefront of the social gaming revolution.
Crispy Gamer: In October of 2008, you guys had like 10 million monthly active users playing on Facebook?
John Earner: Yeah, sounds about right.
Crispy Gamer: ?and in July  you hit the 30 million monthly-user mark. So have the numbers changed since July, and how many active users do you hope to have by the end of the year?
Earner: That's a great question. To the first point, we are now a little bit over 40 million active users a month, and we're very proud of that. We are growing faster than we have ever grown before, and this is due to the fact that platforms such as Facebook are growing so quickly. But also due, in part, to our increasing understanding on how to make games that are truly social that people truly want to play with each other.
We've recently launched two games, and they are helping drive our growth: Crazy Planets and Country Story, which is a farm game that we just launched a few weeks ago. I would say that our goal is for gaming to be a mass-market entertainment medium, and we know that there are over 300 million people on Facebook [in the U.S.] and there is a similar number in China. There are 200 million more on other social networks. We are quickly getting to the point where there's going to be well over a billion to a billion and a half on social networks. We think those people are going to enjoy playing games.
So we try to benchmark our success on the big picture: How many of those people can we get to find and enjoy social games? I think a second metric we use is financial: Worldwide, the gaming business, broadly defined, is an over $40-billion-dollar-a-year business. We think it is reasonable to assume that, at some point in the next few years, social gaming comprises a good chunk of that. Certainly not all of it, but certainly much more than the few-hundred-million-dollar business that it is today.
Crispy Gamer: That's a good point, but here's the million-dollar question: How does your company monetize that (besides on iPhone) -- how do you make money on Facebook, MySpace and Bebo?
Earner: Great question. First, some background: We are venture-funded by Accel Partners and Index Ventures, two tier-one venture capital firms. We have $21 million in funding. We don't need to touch that money. We are highly profitable -- although I can't share our exact revenue numbers -- and the way we do it is a combination of advertising, direct transactions from players spending a few dollars at a time on virtual items or perks in each of our games, and the ability for users to complete offers for free coins.
Amongst those three things we've found quite a profitable business. Microtransactions have been getting a lot of press and hype for being the next possible business-model paradigm. Whether or not it can change journalism or the Internet remains to be told, but we know it's a highly successful business model for games, and one that serves us quite well. What's really going on here is that the last generation of online games was predicated on a person playing the game for an hour, and making a quick decision after that hour whether or not they wanted to spend $9.99 and download a casual game. That model doesn't make sense, because people have so many choices and so little time to make an impulsive decision in that hour on whether or not to spend $10.
By making the games free-to-play and virtually distributed -- socially distributed on Facebook and MySpace -- everyone gets a chance to enjoy the game. And some percentage of those people -- a single-digit number, but a good one -- over time realize that they can improve their game experience by increasing their status or leveling up faster, and they choose to spend money. And that model is an effective model with which you can have tens of millions of people playing your game every month.
Crispy Gamer: I notice that you have two or three games on iPhone -- or rather, there's one out and two others are coming to iPhone at a later date. Is connectivity between iPhone and Facebook important to users? Is it a selling point for users, or do they just consider it a nice extra?
Earner: We believe that it's a strong selling point. As an anecdote to support that, the vast majority of people who have downloaded Who Has the Biggest Brain? for iPhone (that's our first iPhone game) are absolutely using Facebook Connect. They have Connect enabled for that particular app. I would say, longer-term, the entire notion of a device is going to go away in gaming. It is going to cease to be about what device you use to play the game -- whether it's your PC or your iPhone -- and it's going to be about the shared experience. We think Who Has the Biggest Brain? is the beginning of that. No matter how you access it, the person is able to compare their scores and see how their friends are doing. We'd really like to move away from a device-centric world and move to an experience-centric world.
Crispy Gamer: You mentioned that you worked for PlayStation Network. Do you think a game like Crazy Planets would work on PlayStation Network or Xbox Live, or the DS or Wii or Steam, or any other platforms?
Earner: Yeah, sure. I think Steam would potentially work. As someone who has worked in that kind of space before, I think those platforms are doing some interesting things to try and get into the social gaming space. I do think there are some things that have fundamentally changed, or are in the process of changing, in gaming; and those platforms will have to adapt.
First of all, there's just a larger volume of people who are logging on to Facebook every day than people who log on to Xbox Live. And I don't think that's going to change, because of the hardware and purchase requirements it takes to get an Xbox 360. Hundreds of millions of people have a PC in their homes already. So that's one thing. The second is the catalogue environment. One of the fundamental things that makes our business and our company tick is a lack of a catalogue environment. What I mean by that is that players don't find games like Crazy Planets by going to a directory -- a miniscule percent of people find Crazy Planets in that manner. The way to find Crazy Planets or any of our other games is by word of mouth. That word-of-mouth attention doesn't exist in any form on Xbox Live or PlayStation Network. They will need to be there to enjoy the kind of success Facebook is enjoying in gaming.
Crispy Gamer: That's how I found out about Crazy Planets; one of our writers, Gus Mastrapa, mentioned it in our Weekend Playlist, and I started playing it. Let's talk about what the most popular Playfish game on Facebook is right now.
Earner: Right now, the most popular game from Playfish on Facebook is Pet Society. Pet Society was launched a year ago, and has just over 12 million monthly active users. It's basically a virtual world in which you adopt a pet, care for it, and buy various items for it and its apartment; as well as a number of mini-games that you can play. I think what really revolutionized that game versus earlier "pets" games is that we in the gaming industry are more familiar with its socialness. A significant portion of social items purchased in that game are purchased with the intent to give them to your friends. You are able to visit your friends' apartments, see how they have expressed themselves, trade gifts, keep up to date with one another, etc. The game really is best played with your friends.
Crispy Gamer: So, that at the top of the heap --
Earner: That is our top game. We have a bunch of very successful games, though. Restaurant City is a little over 2.8 million daily active users right now. It's similarly in a casual format like Pet Society, but the purpose of that game is to design, build, and operate your own restaurant, and it's all taking place in the context of a neighborhood of restaurants owned by your friends. That's our second-biggest game. Our fastest-growing at this moment is Country Story, which launched a few weeks ago. We really think it takes the genre of farm/sim/social game to the next level.
Earner: Yeah, well, I can't share an exact number, but we can ballpark it. The amount we spend on our titles is hundreds of thousands of dollars versus tens of millions of dollars. So you're looking at two levels of magnitude between a big-budget console title and a social game. We, by the way, are on the high end of development cost for social games because of our production values. We can build one of these games for launch in a few months -- let's call it two to six months -- depending on the title. We can then launch the title, but it's really only 5 to 10 percent complete. A whole slough of the features we intend for that game, we haven't gotten to yet. The advantage of that is that we can get an early read on how successful the game is going to be, and what players really want. Then we can allocate the brunt of our resources over time.
So, for example, over the past year we have invested millions of dollars in Pet Society if you add up the number of resources allocated and the time spent. But we only invested those resources upon knowing that that game was going to be a tremendous success, which really minimized our risk and maximized our ability to provide games and experiences our players want.
To get back to your point, I agree with you. It seems like a pretty compelling way of breaking out of a rut that traditional games are in because it is a hit-driven business, and you have no visibility on whether or not your game is going to be a hit and the vast majority of the costs incurred.
Crispy Gamer: Let's change gears and talk about Crazy Planets. I've certainly heard of Playfish before, and I've even played some of your other games, but Crazy Planets is different from the rest of your Facebook offerings. This is the kind of game that is not necessarily geared towards the more casual player you find on Facebook.
Earner: Right, that's one of the things we're going to find out with this title, but so far, so good. The game is geared a bit more toward the gamer-type person who is on Facebook, but it's still quite a bit simpler than something you might download elsewhere, and it's certainly more social. We do try, when we make each of our games, to think about who will play them and how to tackle different markets. Pet Society is a game that is more popular with females, and Bowling Buddies is geared towards the casual male. With Crazy Planets, we wanted to make a game for gamers, and we know that there are a lot more of those people out there on Facebook because the whole market has opened up.
Crispy Gamer: The number-one question asked by Crazy Planets users shouldn't surprise you: When will multiplayer launch in the game?
Earner: That's a good question. I can't give you a specific timeframe, but I can tell you emphatically that our plan with Crazy Planets has always been to launch multiplayer. We wanted to get the single-player version of the game out there to do some analysis on what people like. Also, like I said earlier, we like shipping and operating our games as a service, so we can see what needs work. We are working very hard right now on carefully designing and building multiplayer. You should see it in the not-too-distant future.
Crispy Gamer: Yeah, I think why there is such a call for it is because many players seem to blow right through the game. One of the things that's keeping me playing is the daily resource-collection from my friends. [Editor's note: This is used to research new weapons and weapons upgrades.] I don't know how I'll feel about it in a week or two, but right now I like it. You do end up grinding on the old maps once you've cleared every galaxy.
Earner: Yeah, I hear you. I think it's easier on our side, as the developers of this game, to see the big picture. With multiplayer in there, a lot of things make a lot of sense, including metal. But I suppose not seeing multiplayer in there, it's not quite a complete picture for you. That said, I really have to emphasize the social aspects of this game, and I think that's what really makes it stand out and be fun. Whether it's your Facebook friends being your teammates and their pictures being on their avatars, to decorating your planet and seeing how your friends decorate theirs -- we're really trying to emphasize those social features; we think this is where this game stands out from games you might have played in the past, like Worms.
Crispy Gamer: Do you think the resource-management end of it -- the daily stuff with players -- is a little too restrictive? It takes an incredibly long time to gather resources for research, mainly because the metals you are getting are chosen at random.
Earner: Yeah, it does take a long time. However, again, we're building this game with more scale in mind, so you're only seeing the tip of the iceberg in terms of your ability to upgrade your weapons and to buy power-ups. I think resource difficulty will be more reasonable when you think about it in the big picture with multiplayer. It's part of the perpetual struggle in game design; if it were too easy to power-level and get more resources, then the game would quickly become less interesting. So it's a tough balance.
Crispy Gamer: People would finish it and probably move on rather quickly.
Earner: So the single-player will be replaced by playing both against your friends and strangers, and so at that point it's not going to feel like it's just mindlessly getting resources. It's going to feel like you are trying to give yourself every advantage in a pretty tough head-to-head competition.
Crispy Gamer: I do think it is clever that your friends on Facebook are your resource providers.
Earner: Thanks. It's a social-distribution mechanic and it works pretty effectively. We also wanted to find ways to teach players of this game how cool it is to express yourself. That is not a mechanic we have seen in Worms-style games before. Resource-collecting gives you a reason to go visit their planet and see what they have done with it. I'm staring at one guy's planet right now that is just off-the-wall crazy. And I wouldn't have seen that if I didn't have an incentive, because that galaxy screen is large.
Crispy Gamer: What kind of extra content do you have planned for this game?
Earner: As we discussed, multiplayer is going to be a big part of the game. I think there's probably room for a more extensive trading mechanic as well. We're certainly going to be adding new ways for players to customize their planets, and we're going to try and add a lot more social features as part of multiplayer -- including a ladder and a leaderboard for further motivation to play. Really, though, the sky is the limit with the things we would like to add. Our list of things we want to add is as long as my arm, and we'll be hitting each of those in a couple of months.
Crispy Gamer: So new weapons, new robots?
Earner: Absolutely. New weapons, new enemies, increased ability to power up those weapons. One of the things we don't have to do is commit to a year-long roadmap. We plan a few months in advance, and then we're continually changing our plans based on what we hear from players. But yeah, you're going to see new weapons, new missions, new types of missions. A huge variety of new stuff is on the way.
Crispy Gamer: I have to be honest here. I don't like some of the mission requirements for medals in the game. Flawless is pretty difficult.
Earner: Well, you know, a lot of times "Achievements" and "Trophies" can be too easy. I think the medals in Crazy Planets are very difficult to obtain, but as a result, people are very proud when they do finally get them. One of the things you'll be seeing soon is the ability to share your medals on Facebook with your friends. We understand that they are tough, but it's something to strive for, and I think people are going to be training up over the next month or two for multiplayer.
Crispy Gamer: Well, no, don't get me wrong; I have 50 of them already --
Earner: Yeah, you're bad-ass.
Crispy Gamer: I hate them when I am doing them, but when I finish them I'm happy that I took the time to do them, and feel a sense of accomplishment. Some of them are just really challenging.
Earner: Yeah, that's true. I certainly don't have anywhere close to 50 myself.
Crispy Gamer: One of the other things I noticed about Crazy Planets is that I started getting friend requests from people I didn't know, who were apparently playing the game. It could be that I went from level 1 to 10 in one day, and that attracted some attention ... but I think it is interesting that people in South America and China are sending friend requests just because of this game.
Earner: Yeah, we're seeing that with this game. Under the hood, it seems to be a small fanatic group of people looking to expand the people they play with beyond their own social circles. The vast majority of players don't do that. One of the cool things about Crazy Planets is that you are not just as strong as your own abilities. For example, you can exploit your friend -- in this case it sounds like you're the friend -- if they level up really far, or get their cluster bomb all the way to max. You're going to want that person on your team, and we think over time that people are going to specialize.
So as the game gets more complex and we expand on it, it'll be a choice. You might have invested all your resources into cluster bombs, and I might have invested mine into grenades, and there is room for all those different kinds of people on your team. I think what you are seeing from the regions you mentioned is that you're really skilled, and a small number of players are OK with having someone outside of their social circle on their team. But most players want somebody they know involved and on their team, and that's really the type of player we had in mind when we built this game.
Crispy Gamer: I have a few actual friends that are playing the game, but I do have two or three people I use regularly on my team that I just don't know -- not that I mind that, because they are basically just characters in a game.
Earner: We hope that over time, as we add more social features, what you'll really care about the most is that emotional level you'll have with your actual friends versus strangers.
Crispy Gamer: Right. Let me just touch on iPhone and mobile platforms for a moment. Is Crazy Planets a game that you plan to bring to that platform? Will it work on the iPhone?
Earner: We haven't announced any plans as of yet, but I don't think you'll see this game on iPhone immediately. Certainly it's a possibility. We have an existing pipeline of iPhone games we've already announced that you'll be seeing -- Geo Challenge, for example. So I think that's where we are going to go first. iPhone is a great platform, and there are a lot of exciting things going on there.
There are a few tricks that would really make a game like Crazy Planets work better on it -- mainly microtransactions. iPhone 3.0 does allow for microtransactions, but it also requires that the app be sold, so you can't have microtransactions of a free app. That's one of the things we'd like to see changed, and I think it would make this game perform better. A second one is the ability to actually use Facebook Connect to invite your friends, whereas currently it's used to display your friends' profiles, more or less. But those are two things we would love have happen, and you'll see more attention to it from us at that point.
Crispy Gamer: So right now you're focusing on iPhone, maybe Android once in awhile, and social networks.
Earner: Yeah, that's right. We're a social gaming company, so I think you've defined us correctly, but I think we focus on experience rather than platforms. You can't just do that tomorrow, but our long-term goal is to talk less about things like iPhone 3GS versus 3G, and more about experiences people want on whatever device they prefer. We are getting close to that. It just so happens that Facebook and other social networks are a great opportunity. They are growing quickly and our games work the best on them.
Crispy Gamer: This will be my last question. There are a lot of games on Facebook -- like Mob Wars and Mafia Wars for instance -- that are pretty deep, or at least perceived as being pretty deep. You guys are making the kinds of games that are perceived as being geared more toward casual players, graphically rich but not necessarily deep. How do you get to the place where your games are a little bit of both?
Earner: I would differ with the point, which is that a game like Mafia Wars or Mob Wars is deep. I think that those games are fairly shallow. There's just a large level progression. If you look at a game like Pet Society, and you compare it to where it was 12 months ago (which we're doing right now as part of our one-year anniversary; you can see people talking in the forums about it), the difference is night and day. You now have all kinds of mini-games; you can go fishing and collecting fish; you now have your own garden with different types of crops and different kinds of plants; dozens of shops, virtual items and millions of players. We think these are actually quite deep games. The key is to continually expand upon the game, and the challenge is to make it a big sandbox. In Pet Society, if you just play it for one day, people would tell you this is not a very deep game. But then, as they play it and really get under the hood, they discover just how deep that game is.
I think the best games, whether they are social games or traditional games, are successful when they are accessible to new players, and extremely complicated and rich for better players. World of Warcraft is a great example of a game that is doing that. Players gain various content and features as they gain higher levels -- and I think you see us doing that as well with our games. Overall, though, on the point of quality, I think the entire space of social gaming on Facebook, MySpace, etc., is going to become higher?quality, and production values are going to rise significantly. It's going to be very important that games have high production value, because people really appreciate that.
Crispy Gamer: I don't know who the leader is in the social gaming space, but I can say that I think Playfish is at the top when it comes to production values.
Earner: Well, we appreciate that. I can tell you that what we're really focused on is making a great experience for players. That's our job, that's what we wake up every morning loving to do, and we think if we do right by players, they'll do right by us by playing our games.
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