Interview: Outspark Expands, Creates MMO Service Platform

When Outspark first came onto the scene in 2008, it was just one in a sea -- now seven seas, probably -- of companies porting over Korean MMOs. But the team, lead by CEO and ex-Yahoo Games exec Susan Choe, has always had a grander vision. Now, ahead of the formal announcement, Choe outlines the Outspark platform, which will be available for developers from major AAA publishers to tiny two-man shops. Though the company does operate its own free-to-play games, and will continue to do so in the future, it is opening up its solution to external publishers and developers looking for a foothold in this complex market. The platform will offer a vertically-integrated solution for the deployment of games online: support for web-based and in-game item sales tied into Outspark's own Spark Cash payment system; an Outspark installer package for game clients; integration with the Outspark user system; game stats and finances reports for developers; client content management for patches, and cross-marketing opportunities with the other titles in the Outspark lineup. To learn more about this evolution of the free-to-play business, Gamasutra went to Outspark's San Francisco offices and spoke with Choe. We first spoke, when you'd just started up, entering the market with mainly Korean games you'd been translating -- but I know this wasn't your end goal. How have things evolved? Susan Choe: So, the goal back then, when we first met, I guess early '08, was really to build out communities around each of these MMOG games, and then eventually, by eating our own dog food, we could actually create this developer-friendly platform where developers can self-publish their games -- but to do that, you need a portal where users can look at and talk about lots of different games for us to be able to promote and cross-market, right? So since then we've executed on all three pieces. First, we've launched about five, going on six, games now. I think we're one of the largest North American online publishers of these kinds of -- I hate calling it "free to play," because it's free forever if you want it to be, and we have a lot of users who play for free forever, so I think it's a bit of a misnomer But on the other hand, the game quality, I think, is such that people are willing to pay a premium for additional stuff. So I've heard something like "freemiums". I think that's probably more accurate. Anyhow, we've gathered probably the largest North American audience to date that I know of, because other publishers -- of the EA type of size, to our similar types of publisher sizes -- they are coming to us and saying, "Wow! You guys are like the largest we've ever seen." So, four million regs, and about 80 percent of that is North America. And they're in that age sweet spot of 13 to 25. So, that's one milestone, in terms of getting a really healthy base of users -- that are a couple of million coming in every month, and about 5.4 million visits a month right now, and growing. And then, revenue-wise, we have a really high ARPU base of users. And so, both the total base of users is going to at least double, if not triple this year, and also the revenues are as such that we're going to break even in a couple of months. So, all we want to do is just share that with other game developers. Up to now you've been republishing games that were available in Asia. Are all of the games that you've put out so far republished, or are some of them original? SC: The games out to date are, yes; the games in the pipeline, no. We have games that are being signed up from Asia as well as U.S., and hopefully even some from Europe as well. Let's talk about where you're headed, and this platform. SC: I don't know how familiar you are with Twofish, for instance, where we have registration, billing, payment, the ability to manage content -- not just upload new game patches and whatnot, but also message what's going on to the users. Plus, [we have] some data behind how the gamers are coming in, and what they're doing, and what they're buying, and all of that stuff. And that's part of our platform. And of course the launcher/installer, and a web-based store. So that's seven items in there, all in-house developed. And we can make that available with a couple APIs that game developers can hook into their game, -- essentially it takes about a week for most people to plug in via one or two engineers, and it's a plug-and-play model. And that platform, plus the traffic of users that we cross-market to, as well as cross-market via email to our reg base, that's what we're going to offer to game developers. There are a lot of different things that are in the offing right now -- anything from, Whirled, which is a portal of Flash developers with a virtual world context, to Metaplace, and on from there... There's a whole range of things coming out, so that's exactly what I want to find out: where do you guys fit in to this equation? SC: We're not necessarily trying to grow our own virtual world universe or our own social community; we're just trying to offer up the platform with marketing traffic. And what that platform does is it's essentially a virtual game publisher in a box. So if you hook up to it, you can use our registration; you can use our store and billing payments; and, again, look at the data to see who's doing what -- pretty simple. And then the user traffic -- again, we're not necessarily going to just leave it up to chance; we're going to actually take a proactive approach in partnering with some of these game developers to help them be featured. So you'd look at it as an infrastructure and marketing cross-blend? SC: Yeah, you can look at it as a combination of a marketing agency that has a platform that also has the traffic -- vertically integrated. So this is something that developers who are working on reasonably high profile free-to-play, freemium-type games would be going for; this isn't something that enables people on the sort-of hobbyist scale to plug in? SC: No, we have teams that are as small as three guys in an apartment in San Francisco knocking out online games, to a handful of teams doing it as well. We actually have been approached by the big game developers and publishers, along with the smaller guys, too. Again, the original vision was really to equalize the playing field, so all you need is good gameplay, and hopefully a good plan to monetize. How does it scale? Is it something that only applies to free-to-play MMOs? Because it seems difficult to imagine that just a handful of guys, even if they're outsourcing the content, could really knock something together. SC: Well, you know, the thing is, the games that do well, for the large part: once they get the initial push in marketing? If the gameplay is good, like any game, it's viral. 60, 70 percent of new users would be viral. So how you monetize it is how we lend a bit of help too. Some of the mechanics behind our web-based store actually leverage a lot of the data, so that you're not always having to think about what's selling, and why, and "Where do I promote it?" We do that across the game web pages, or the store. But the niche that it's serving is going to be primarily these high-level user engagement and retention games, like MMOs, that people play? Or does it have more breadth of possibility as a platform? SC: I actually would love to just put up games with the best gameplay, no matter what it is. Our first and foremost goal is to offer fun entertainment to the gamers, and the rest does tend to work out. But the game developers also have to be committed to this. Because if they're not at least saying, "Okay, I'm going to work on this; at least for the next three to six months, I'm really going to try and make this work." I would figure that if they want to make the effort to integrate and get onto this platform, that process alone should weed out some of the, "Eh, this could be cool..." kind of a thing. Sure, I definitely see that. The tools and stuff that you have sound like they're really aimed at, basically, MMOs. SC: Because of the audience...? It's an advantage within the audience that you have. SC: Well, we have cooking games; we have shooting games; we have racing games; we have role playing games. And the peak concurrent users for these games are all really high. So, that's why we think we could try different types of games. The paying user rates might be different, across these games, but really the interest level has been fairly broad. We're not the Warcraft audience -- in a way, this is very casual to mid-casual. If look at what they're doing and buying, the highest selling items are things like beauty shop coupons, wedding licenses, things that are very socially-oriented. Of course they buy the potions and the level-ups, but the top five selling items are pretty social. You might be aghast at that, but it's the new audience! No, I wouldn't say that. It's just interesting to get the picture of your business. Three Rings: they started with Puzzle Pirates, which again is a sort-of mid-casual MMO, and then as their platform, Whirled, came online, it brought in things that are more traditional, like casual Flash games. So there's a breadth of things that can be done online; it's a bit nebulous. SC: Yeah, I see what you're saying. I think Three Rings' team is great, by the way. I mean, they've been around longer than anyone I know. Daniel and his team have been at it for a while, and I think because they had one game that was an RPG, and then you didn't necessarily broaden the genre of games before you went to this portal mode, of course you're going to have more RPG kind-of mid-core users mostly. And I haven't seen Whirled lately, but I think the concept is great; it's just the audience base that you have does matter -- to your point. So, if they were already used to playing mostly RPGs, then that's the audience space you're going to have. And all the sudden you introduce really casual Flash games, and then on top of that it might appeal to, like, I don't know, chicks or housewives, you know? Right. It's a struggle. SC: It's like oil and water. So that's why we tested some of these cooking games, to see how they would do. And what it ended up doing was, the girls did come, and because the guys postulated that the girls would come, they started playing it too, and lo and behold, they started getting hooked. You're talking about cross-marketing potential that occurs with people who bring their games into your service being targeted for user acquisition, but how much motion do you see between different Outspark titles? SC: We see a lot, and I think that there's at least two types of movement: one is, they're playing game A, and game B might not even look remotely similar -- like one is racing and the other is RPG, and they play it. So there's 20, 30 percent overlap there, and that happens often. But there are also people who may have played a game for a while and then got bored, or they got into a game and just didn't think it was really that fun for them, so they go onto a new game. That's why at the end of the day we get so much traffic that we were like, "Okay, it's time for us to really open this up." Even before we started making this -- we haven't made it public, but we have three different publishers in North America... You would know the names. They're big -- and aren't necessarily online. They may be, but they're not in our free-to-play space. And then another about three different huge game developers are coming to us and saying, "Hey, can we partner with you? Because we hear that you're the largest North American, and starting to get more European too, audience space." I think we're one of the few publishers in this space that's physically based in San Francisco, and our users are based in North America. Do you have a unified currency across all your games? SC: Yes. We have a single ID with which you can log in to every game; we have Spark Cash with which you can buy anything in the games that we have. And is that something that's going to be part of the solution? SC: Yes. Do you have cards in stores now? SC: Yes. Target, Best Buy, it's going into GameStop pretty soon, Wal-Mart. So, we do have, and we're adding more and more payment solutions. So far I think we have five, and we're going to add another five in the next few months. You do a lot of data tracking on your titles. Is that something that you're going to offer to people who become clients? SC: Yes. Of course. If you look at our web-based data, it's real-time available -- every hour, it updates in terms of how many people are coming in, what levels they're at, what they're buying, and how much revenue is accumulated. So in a way, it's almost like you're running your own little commerce world, and you could see. That has two effects: one is, hopefully it motivates more on the game developers, Or it would be also a way for them to keep the whole transaction piece honest -- because if they start seeing issues with people using bad credit cards, they should be able to see it right away. The other piece is: at the end of the month, net of default, chargebacks, all those things, they'd have a sense of how much they're making. Because human beings always want to see where they're headed. Game developers can't live by dreams alone, so they need to be able to also forecast, "Hmm... Users are growing. Are we making money, to be able to pay for those servers?" Do you assist with the server solutions as well? SC: We would do recommendations. Right now we're looking for partners to co-sponsor some of these. It's not -- as you probably know, it's not terribly expensive, and because these are, I would say, pretty non-demanding server requirements, there are a lot of institutional companies who can sponsor these, and they're starting to pop up.