I am increasingly annoyed with folks blithely categorising the casual games ‘space’ as being equivalent to downloadable games and using the two terms interchangeably. My contention is that downloadable games in their current form, or ‘shareware 2.0’, represent an early and clumsy attempt to monetize the casual games audience, and in ten years will be regarded as little more than an odd footnote in gaming history.
The reason, of course, that people are making this categorisation error is that some people have found that they can make money making $20 try-before-you-buy games. I tend to believe that the reason that this business opportunity exists has little to do with customer satisfaction and needs, and has a whole lot to do with the often lazy strategy of some large traffic aggregators in casual gaming. Many of these sites have not had to do anything much to earn their vast traffic flows; like landed gentry, they are tithed great swathes of players by divine right of their corporate parentage.
These traffic tithes make it a lot easier to tolerate the economics of downloadable games. If you look at the successful casual games sites that have actually built tremendous traffic, such as Neopets, Miniclip, Pogo (pre-AOL deal), Big Fish Games, Habbo Hotel, etc. they mostly have nothing to do with downloadable games. Big Fish is the exception, and with its Ion Thunder acquisition is making a clear bid towards the non-downlodable space.
So, about those economics. Four years into the business and we have still to see a title with greater than ~2% conversion, the average successful game scoring around 1%. Only ~30% of players actually tolerate downloads at all, the other 70% preferring to play online. I believe this percentage of download-intolerant players is increasing. So, on a per-game basis, we have a total monetisation of $20 once-off from sub-1% of potential customers. Note that I’m ignoring advertising for now, although I’m aware that that’s where many of the portals make their real money. I’m ignoring it not least because until quite recently the portals were adamant about not sharing that revenue with developers, and I tend to think about things from the developer or the player’s point of view.
It’s ridiculous to begin to think that an offering with such abysmal revenue per potential customer is ‘the solution’. That’s before I even get started on the recursive ‘optimisation’ that’s taken place, such that games are increasingly made to appeal to the same 1-2%, scavenging and recycling the same themes and gameplay again and again. If you farm your land for the same cash crop, year upon year, you’ll exhaust the land. The extent to which downloadable games are foisted on players on some sites, given their demonstrable lack of interest in paying for them, indicates to me a woeful lack of strategic thinking and a very short-term revenue focus. I believe that, like the carriers in the mobile phone games business eschewing free trials to optimise short-term revenue at the expense of their customers, there’s the potential that over-focus on downloadable games will begin to drive away the 99% of players that don’t find them compelling enough to purchase.
Obviously I have an axe to grind here, but I do not claim that I know the answer. Puzzle Pirates, whose ~$1M development cost is an order of magnitude more than most downloadable games, has so far just met the approximate lifetime revenues (~$3M+ to date) of a AAA downloadable hit (Longer-term the jury is still out, as PP already has much longer tail than most casual games and continues to grow revenues.). Trying new things is dangerous and scary, and will often fail.
My point is that casual games should be a space rife with tremendous innovation. Casual gamers represent the big opportunity in games. Don’t build a downloadable ghetto and call it casual games. If you do, then the rest of us who are interested in monetizing that other 99% will have to think up a different name for the real ‘large audience’ space, with associated conferences and so forth. Save us!
(This post was inspired by and adapted from a post I made to the excellent IGDA casual games SIG mailing list)
I respect what you’re saying, but doesn’t this come down in large measure to the conversion rate? I presume you’d be ecstatic with try-before-you-buy if the conversion rate were 100%. Where then, in between 1% and 100%, would you find the business model tolerable?
It’s not just a matter of conversion rate. Online games are, I believe, the entertainment medium of the future. Downloadable games do little or nothing to leverage the network beyond distribution. I think that’s a shame. Even if the revenue opportunities were comparable (which I firmly believe they are not), then I would asthetically and ‘politically’ (in the sense that I prefer games that encourage people to interact rather than sit at their computer and click click click) prefer social online community-oriented games.
Ah, I get it. It’s really two separate issues, then: an inefficient business model and games with no social element. I agree with your view of both issues as they currently stand, but it’s possible to solve one independently of the other. I can easily imagine Guild Wars, say, succeeding as a try-before-you-buy download. Conversely, there is, ahem, a network-connected game console which shall remain nameless, where the micropayment system gives much, *much* better conversion rates than those you quote… but the typical game there still does nothing to use the network.
I think the monetization issue will be solved before the gameplay issue, simply because it’s the kind of problem that succumbs to big companies throwing big money at it. Infusing the typical casual game with social elements will take infrastructure (so that it’s cheap for two guys in a garage to implement), education and time. Unfortunately, solving the monetization problem will most likely slow that latter process down, by removing the pressure to innovate.