Interview: Spil Games In The Spotlight

There’s no question that casual games are a force to be reckoned with in today’s industry, but who’s leading the charge? Spil Games leaped to the fore this March by announcing its recent establishment as the most-visited portal for casual games worldwide. The international reach of Spil Games is all the more impressive when considering its origins. Once a small Dutch company dedicated to online chat services, Spil now has a vast array of sites serving various countries with multiplayer games and other titles aimed at the casual user. It’s the sort of rise that invites questions, and we sent a few them to Peter Driessen, CEO and co-founder of Spil Games. What made you get into the game business in the first place? When we founded Spil Games in 2001, we primarily operated community sites with chat features. We found that many of the kids on our online chat and community sites were playing casual games and it was an “eye opener” for us. Through our initial interaction with this audience, we saw a lot of opportunity to cater to the demand for online entertainment that was fun and engaging, but also very accessible. How did Spil Games go from a company focused on Dutch online chat communities to a company that serves nearly twenty different countries? While we were operating the online chat communities in the Netherlands, we discovered that our audiences wanted more engaging interactive content: games. So, we launched our first casual games portal in 2004. Once we saw that visitors from other countries were visiting our Dutch-based portal, we began expanding into those markets and added localized portals for those countries to our portfolio. Over the last couple years, the growth has been exponential because we have been continuing to expand into emerging territories as quickly and efficiently as possible. We’re an agile company, which has been our key to speedy entry into new markets. In your opinion, when did the boom in online games truly start? We had an advantage in the European market because of our early testing of online community sites and interactive content back in 2001. We saw the potential and the demand for online casual games then, and so we launched our first casual games portal in 2004. In Europe, we saw the most explosive growth of online casual games later on in 2006. From December 2007 to December 2008, Spil Games saw a 269 percent increase in visitors, according to ComScore. To what do you attribute that? Was there any one country that saw a huge increase in portal users? We attribute the tremendous growth of our portal network to our dedication to portal segmentation. Instead of having one portal catering to a general audience, we provide three types of portals for specific demographic groups. By focusing on segmented portals, we are able to engage specific demographics more deeply and have had great success in drawing traffic and larger audiences to these portals. For example, one of our flagship portals is GirlsGoGames.com. It’s designed specifically for young girls in the United States with content localized for this audience. By creating a portal designed for this specific segment of young girls, we’re able to attract a greater following from this audience. In addition, we’ve always made it possible for players to get into a game and start playing with only two clicks, making it very quick and easy for our visitors to jump into our games. We’re very focused on accessibility and low barriers to entry for our audiences. As for the country with the greatest increase in traffic during 2008, China was one of the strongest countries in year over year growth. Also, our portals in the United Kingdom grew 113 percent and portals in France grew 52 percent. Spil runs portals for a variety of users: parents, children, "tweens," and so on. In which demographic group have you seen the most growth in the past year? Overall, our portals targeted to young girls have seen the most growth. This is due to our focus on branding and targeted content. As with all our target groups, including tweens and families, we provide the girls with games that meet their specific demands. For example, young girls tend to like avatar customization and creative expression rather than reactionary or competitive games. We provide young girls with an online environment where they can find exactly these types of games and interactive experiences that they are looking for and access them quickly. Will Spil focus more on strengthening its appeal to existing audiences in 2009, or will it focus more on introducing new types of games for new demographics? What sort of new titles do you plan to feature this year? In 2009, our focus at Spil Games is on continuously improving our portals by adding new features such as high score leader boards. Of course, we’ll continue to offer new games on each portal that are specific to the portal’s demographic, as this remains our commitment to our users. We are also always looking at the possibilities of new demographic groups in emerging markets within China, Mexico, and Brazil. As for our own titles, we’ll continue to focus on developing fun, high-quality titles that cater to specific audiences. How does Spil go about customizing game portals for different countries? Are some games removed from certain portals because of cultural issues? Our portals are customized and localized based on several factors. The first factor is the demographic group, with our focus now on three such groups: young girls, tweens (girls and boys), and families (mothers playing with their children). Then we localize each portal based on game content, game categories, language, etc. When entering any new market, it’s very important to us that we consider as many social and cultural implications as possible to avoid confusing or offensive content. This is why we have a dedicated localization team at Spil Games. How do you think the economy will affect browser-based online games in comparison to PC and console games? The biggest contrast between browser-based online games and console and downloadable PC games lies simply in the respective costs to the consumer. A console game or downloadable game for the PC can cost anywhere from $20-60, whereas browser-based online games are typically free and easy to access. In a recession, the marginal console gamers will look for cheaper entertainment options online, and this is part of the reason why we’ve seen an increase in traffic to our casual game portals. From a revenue perspective, online games are a great option for advertisers because they can deeply engage a target audience with their brand. As advertisement budgets decrease this year, marketers will seek the biggest bang for their buck, looking to more direct engagement with specific demographics. As such, we’ve seen an increase in online advertising spending on our network of portals. In fact, our global revenue grew 125% last year. Also, because of the global recession, we do think there will be less money available for research and development, causing development time to increase. Generally, though, the casual games market is in a strong position and it will get even stronger over time. Spil Games has pointed to China, Mexico, and Brazil as the largest emerging markets for online games. Why do you think they're the growth leaders? We identify emerging markets based on the relative degrees of broadband installation and market growth. For instance, in China the number of new Internet users is increasing at a very rapid rate. We are expanding into these markets because new Internet users are our ideal customers: they demand low barriers to access online entertainment, spend less time online per day than in established markets, and are more likely to revisit sites with which they are familiar. China, Mexico, and Brazil exhibit an above average acceleration of Internet-adoption rates, and this is why we’re targeting them for expansion in 2009. Out of the countries in which you're looking to expand, which one poses the greatest challenges? Why? It’s not one of our top three growth sectors, but we see Russia as the most challenging market. Due to the fact that there is already strong competition there in the family and tweens demographics, we have to focus on a clearer differentiation. Additionally, we find it, culturally, very difficult to localize for Russia and there are also strict government regulations about content. However, Russia has an incredibly viable market for our business once we’ve overcome the challenges of entering it. Among all of the games Spil offers online, is there one that stands out as the top seller or the most talked about? Do you have a personal favorite? Out of all our games, I enjoy one of our latest games called Horse Eventing because it has such amazing-quality graphics. Also, when I’m playing a game in my free time, I really enjoy Bubble Shooter as it’s both relaxing and strategic. I must also add that I love Uphill Rush. Historically one of our most popular games, Uphill Rush is especially fun for me because my nine-year-old son plays it often and it warms my heart to see him having fun. -- Here are the answers to your follow up questions for Spil Games' CEO Peter Driessen: 1) When it comes to a game like Club Penguin that is in itself an established brand and a destination, what’s the value in adding it to your portal network? Can you explain the business behind that, and the value to Spil? - Well, let’s look at Spil Games’ portals as a leading specialty store: when consumers are looking for that specialty (online games), they know this store is their convenient one-stop shop for the largest variety of that product. A premium brand like Disney definitely doesn’t want its products to be missing from that store’s shelves. 2) It’s interesting that you guys collaborated with SCE on the Infamous game. How do you view this mix of a console exclusive game and online web gaming? Is it a pure marketing exercise from Sony’s or your perspective? - The web version of a big-name game like this acts as a sneak peek at the full console title where potential buyers can learn the premise and basics of the game. While Spil Games is happy to offer its users an exclusive first look at a new title, the online game version really acts as a great tool for Sony to expose people to its new property and trigger more sales of the full console version.There's no question that casual games are a force to be reckoned with in today's industry, but who's leading the charge? Spil Games leaped to the fore this March by announcing its recent establishment as the most-visited portal for casual games worldwide. The international reach of Spil Games is all the more impressive when considering its origins. Once a small Dutch company dedicated to online chat services, Spil now has a vast array of sites serving various countries with multiplayer games and other titles aimed at the casual user. It's the sort of rise that invites questions, and we sent a few them to Peter Driessen, CEO and co-founder of Spil Games. What made you get into the game business in the first place? When we founded Spil Games in 2001, we primarily operated community sites with chat features. We found that many of the kids on our online chat and community sites were playing casual games and it was an "eye opener" for us. Through our initial interaction with this audience, we saw a lot of opportunity to cater to the demand for online entertainment that was fun and engaging, but also very accessible. How did Spil Games go from a company focused on Dutch online chat communities to a company that serves nearly twenty different countries? While we were operating the online chat communities in the Netherlands, we discovered that our audiences wanted more engaging interactive content: games. So, we launched our first casual games portal in 2004. Once we saw that visitors from other countries were visiting our Dutch-based portal, we began expanding into those markets and added localized portals for those countries to our portfolio. Over the last couple years, the growth has been exponential because we have been continuing to expand into emerging territories as quickly and efficiently as possible. We're an agile company, which has been our key to speedy entry into new markets. In your opinion, when did the boom in online games truly start? We had an advantage in the European market because of our early testing of online community sites and interactive content back in 2001. We saw the potential and the demand for online casual games then, and so we launched our first casual games portal in 2004. In Europe, we saw the most explosive growth of online casual games later on in 2006. From December 2007 to December 2008, Spil Games saw a 269 percent increase in visitors, according to ComScore. To what do you attribute that? Was there any one country that saw a huge increase in portal users? We attribute the tremendous growth of our portal network to our dedication to portal segmentation. Instead of having one portal catering to a general audience, we provide three types of portals for specific demographic groups. By focusing on segmented portals, we are able to engage specific demographics more deeply and have had great success in drawing traffic and larger audiences to these portals. For example, one of our flagship portals is GirlsGoGames.com. It's designed specifically for young girls in the United States with content localized for this audience. By creating a portal designed for this specific segment of young girls, we're able to attract a greater following from this audience. In addition, we've always made it possible for players to get into a game and start playing with only two clicks, making it very quick and easy for our visitors to jump into our games. We're very focused on accessibility and low barriers to entry for our audiences. As for the country with the greatest increase in traffic during 2008, China was one of the strongest countries in year over year growth. Also, our portals in the United Kingdom grew 113 percent and portals in France grew 52 percent. Spil runs portals for a variety of users: parents, children, "tweens," and so on. In which demographic group have you seen the most growth in the past year? Overall, our portals targeted to young girls have seen the most growth. This is due to our focus on branding and targeted content. As with all our target groups, including tweens and families, we provide the girls with games that meet their specific demands. For example, young girls tend to like avatar customization and creative expression rather than reactionary or competitive games. We provide young girls with an online environment where they can find exactly these types of games and interactive experiences that they are looking for and access them quickly. Will Spil focus more on strengthening its appeal to existing audiences in 2009, or will it focus more on introducing new types of games for new demographics? What sort of new titles do you plan to feature this year? In 2009, our focus at Spil Games is on continuously improving our portals by adding new features such as high score leader boards. Of course, we'll continue to offer new games on each portal that are specific to the portal's demographic, as this remains our commitment to our users. We are also always looking at the possibilities of new demographic groups in emerging markets within China, Mexico, and Brazil. As for our own titles, we'll continue to focus on developing fun, high-quality titles that cater to specific audiences. How does Spil go about customizing game portals for different countries? Are some games removed from certain portals because of cultural issues? Our portals are customized and localized based on several factors. The first factor is the demographic group, with our focus now on three such groups: young girls, tweens (girls and boys), and families (mothers playing with their children). Then we localize each portal based on game content, game categories, language, etc. When entering any new market, it's very important to us that we consider as many social and cultural implications as possible to avoid confusing or offensive content. This is why we have a dedicated localization team at Spil Games. How do you think the economy will affect browser-based online games in comparison to PC and console games? The biggest contrast between browser-based online games and console and downloadable PC games lies simply in the respective costs to the consumer. A console game or downloadable game for the PC can cost anywhere from $20-60, whereas browser-based online games are typically free and easy to access. In a recession, the marginal console gamers will look for cheaper entertainment options online, and this is part of the reason why we've seen an increase in traffic to our casual game portals. From a revenue perspective, online games are a great option for advertisers because they can deeply engage a target audience with their brand. As advertisement budgets decrease this year, marketers will seek the biggest bang for their buck, looking to more direct engagement with specific demographics. As such, we've seen an increase in online advertising spending on our network of portals. In fact, our global revenue grew 125% last year. Also, because of the global recession, we do think there will be less money available for research and development, causing development time to increase. Generally, though, the casual games market is in a strong position and it will get even stronger over time. Spil Games has pointed to China, Mexico, and Brazil as the largest emerging markets for online games. Why do you think they're the growth leaders? We identify emerging markets based on the relative degrees of broadband installation and market growth. For instance, in China the number of new Internet users is increasing at a very rapid rate. We are expanding into these markets because new Internet users are our ideal customers: they demand low barriers to access online entertainment, spend less time online per day than in established markets, and are more likely to revisit sites with which they are familiar. China, Mexico, and Brazil exhibit an above average acceleration of Internet-adoption rates, and this is why we're targeting them for expansion in 2009. Out of the countries in which you're looking to expand, which one poses the greatest challenges? Why? It's not one of our top three growth sectors, but we see Russia as the most challenging market. Due to the fact that there is already strong competition there in the family and tweens demographics, we have to focus on a clearer differentiation. Additionally, we find it, culturally, very difficult to localize for Russia and there are also strict government regulations about content. However, Russia has an incredibly viable market for our business once we've overcome the challenges of entering it. Among all of the games Spil offers online, is there one that stands out as the top seller or the most talked about? Do you have a personal favorite? Out of all our games, I enjoy one of our latest games called Horse Eventing because it has such amazing-quality graphics. Also, when I'm playing a game in my free time, I really enjoy Bubble Shooter as it's both relaxing and strategic. I must also add that I love Uphill Rush. Historically one of our most popular games, Uphill Rush is especially fun for me because my nine-year-old son plays it often and it warms my heart to see him having fun.