GDC Austin: Newtoy On Becoming The 'Nintendo Of The iPhone'

"For me, Nintendogs was a revelation," said Paul Bettner, CEO of iPhone game developer Newtoy, makers of the social iPhone games Chess With Friends and Words With Friends. "I saw the light. Nintendo was going after what they do best, that blue ocean strategy." In other words, he wanted Newtoy, which was born out of Microsoft's Ensemble Studios closure, to service a new market instead of competing directly with the current market's big hitters. He wanted to think of games that could only exist on iPhone -- ones that take advantage of community and connectivity, and iPhone's other features. Chess With Friends came from that philosophy. The game got good support from Apple, which featured the game prominently on the App Store as Pick of the Week in March. The vote of confidence led to a nice jump in sales. But it still didn't break the top 100 Apps on the sales ranking list on the App Store, meaning visibility for the game would be low. For iPhone developers, making the top 100 is a crucial requisite for having a successful game. Bettner said he didn't pack up and go home. There is a life outside of the Top 100, and it involves sustained growth of a game's sales and good consumer retention, two things possessed by Chess With Friends and its Scrabble-style counterpart, Words With Friends, he said. Combined, Chess and Words, which both have ad-supported free and paid versions, have been downloaded 500 million times so far. They draw 50,000 active users daily, and are tracking 200,000 for September, Bettner said. The ratio of free to paid versions is 5:1. Citing a Pinch Media report, Bettner said the average App user (including games and other Apps) spends less than five minutes on an App per day, with less than one percent user retention. Chess and Words have greater than 20 percent user retention and an average usage time of 1.5 hours per day. As a user of the an ad-supported model, he admitted that the ad market is currently rough, and it can lead to enormous spikes and valleys in day-to-day revenues, but he claimed trends are becoming more predictable. "It can be a bit scary when your daily revenues are [varying] so wildly," he said. So has his Nintendo inspiration paid off in spades? Not quite yet. But he's optimistic. "If your app is capable of driving sustained user growth... success can definitely follow," he said.