Casual Connect: Fuel's Robbins On Casual Business Models

Author: by Luke Stapley, Leigh Alexander

This week, at the Casual Connect conference in Seattle, a panel called "Casual Games are Not Just Downloads" explored the alternatives to try-before-you-buy, from advertising and advergames to microtransactions and the mobile and console spaces, as a method of generating revenue for casual game developers. The session's goal was to indicate the ease of adoption of such business models for developers. Brian Robbins of branded entertainment advertising agency Fuel Industries has been working in the casual games space since 1999, snd spoke at the panel. "I've never made a $20 game -- though I've been in the industry for 8 years,” he said. The viability of the models discussed in the panel depends on who's adopting them, as many would require changes to a game's design fundamentals. As to the ad-supported, browser-based casual game space in particular, Robbins noted some pros and cons of various potential models. Robbins said making downloadable games available through web portals was "easy money," adding that the ad market is "great." The downside? "Portals don't want to share," he noted, "and when they do share, you get poor revenue share. Only the portals are getting 50% of the share in advertising." He also advised that while revenue is proportionately higher with the number of integrated ads, in-game advertisements, as well as those embedded in a browser or wrapped in a download, can get annoying for players. Robbins is a fan of Kongregate, calling it the "YouTube of games," and cited it alongside Miniclip.com as examples of websites successfully offering web-based games built in Flash. The pros to this methodology? According to Robbins, the variety of sites, "fairly significant," ad revenue better positioning to use the community to their advantage are all big pluses. However, Robbins noted that not all sites share revenue from web versions of games, and that Flash and Shockwave proficiency are required. Robbins said the emerging market of downloadables for game consoles is "really sweet," and said that "Nintendo might be the most open." Robbins is in favor of this approach because of "great conversion rates," as well as a high profile in the gaming industry and "huge bragging rights," and room for innovation. Some downsides he highlighted, though, include the requirement of approval from the console's maker, the relatively high cost of production needed and the high price of tools. Additionally, Robbins said that success hasn't been proven for the Wii or PS3. Next, Robbins discussed advergaming -- building games for and around client brands. "This is not putting logos in a Bejeweled clone," he cautioned, advising interested developers to work directly with the brand agencies. He cited Blitz's Xbox Burger King games, noting that the fast food chain saw a 40% increase in sales on the heels of their gaming promotion. Robbins said a big pro of advergaming is the equitable relationship between budget and risk -- if a budget is fixed, so is the amount of risk involved, and therefore designers and developers can work on projects without a focus on sales. The downside, however, is that the sales process can be very long, some brands can be challenging to work with, and there's little room for a huge payoff. "I'm surprised a lot of users haven't heard of [Shockwave Unlimited]," Robbins said, discussing it and other fixed-fee subscription sites like BigFish.com. The recurring fees -- which mean stable monthly revenue -- are a big win for this approach, Robbins says, but it comes with the continual challenge of providing new content and the difficulty of building it. Robbins next discussed microtransactions -- the growing trend of paying for small items in worlds like Puzzle Pirates and Habbo. On one hand, they allow the game to be offered for free while creating a recurring revenue stream with the potential for higher per-person revenue, direct to the game's owners. On the other hand, a populous userbase is a requirement for this approach to be successful, and multiplayer is absolutely required. "Portals may take convincing," Robbins added. Robbins defined skill-based games as pseudo-gambling where the maker takes a cut, giving King.com as an example. This business model benefits from easy modification and an additional revenue stream -- on the downside, though, that revenue stream tends to be small, he said. Last, Robbins touched on mobile games, which he said are good to license (with successful titles) and there's a lot of current interest in the space. However, Robbins also said supporting all handsets is an "enormous amount of work," and there's not a lot of revenue involved. So what's next for the space? Robbins predicts lots more communities, and for web-based MMOs to start adopting multiple business models. He also expects companies to converge, more community-created content, and would like to see a true mass market game portal encompassing more Web 2.0 ideas. Lastly, Robbins says to look for casual games driving further into the middle-aged female market, citing PopCap's strong core userbase of 30-40 year-old childless women, noting that developers, advertisers and everyone in the space would benefit from the expansion of casual gaming into a larger mass market.