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Thanks to the popularity of social networks and online communities, the social gaming industry is booming. It's no longer a niche sector, and online games are now popular with people of all ages and demographics.
In fact, contrary to long-standing stereotypes, a survey published earlier this year revealed that the average social gamer is a 43-year-old woman.
Social gaming is a fast-moving landscape, and becoming increasingly significant as consumers are spending a greater proportion of their time playing online games. As evidence of this, London hosted the first European Social Gaming Summit at Chelsea Football Club recently, which explored the evolution of this rapidly emerging sector.
Could you give us an overview of Bigpoint? How long has the company been in business and what types of gaming products you offer?
Bigpoint is one of the largest gaming portals in the world and we were founded in 2002. We develop and operate browser games and act as a publisher, content provider and developer. Our focus is on games that are playable in the browser with no download and that are free-to-play for all users.
As a publisher, we also allow independent developers to upload their browser and casual games directly to Bigpoint.com so they can introduce their games to our huge audience.
As a content provider, we’ve partnered with media companies around the world including MTV, MySpace and AOL to offer our content to their communities. The media companies love it as it helps them engage with their users and provide compelling content, and they get to monetise those users as they take a proportion of the revenue.
As a developer, we are responsible for creating our own games in-house and we’re constantly challenging ourselves to take browser games to the next level – such as our development with Unity 3D to create 3D browser games like Ruined Online and the soon-to-be-launched Battlestar Galactica Online.
What is your business model? How does the company make money?
Bigpoint games are free-to-play which allows us to reach a huge audience as no matter what their age or disposable income, people can still play and enjoy the games. We monetise our games through in-game micro-transactions where players can choose to buy items that give them a boost in the game, or just be something that they have to have now.
For example, you can buy “super grow” fertiliser in Farmerama which will halve crop growing time. This model has proved hugely successful and we are generating significant revenues, and just as importantly, our users are very happy with it as well as they still get free access.
Who is your core audience, and how do demographics vary between different types of gaming products?
Our core audience is anyone who wants to take a bit of time out and have some fun online. We offer everything from engaging casual games like Farmerama to complex long-term flash games like Dark Orbit, right through to 3D games like Battlestar Galactica (which will be launched soon). The demographics are obviously different for each game, but there’s something for everyone at Bigpoint.com.
What’s more important for different types of users: the gaming experience and the game itself, or the ability to play with friends and family?
Both and all of the above. We think that this is a function of the game. Clearly the gaming experience is critical. But we know that our players also love the community aspect – whether that’s playing against (or with) real-life friends, or in a multiplayer format with and against like-minded gamers across the world. The community creates both opportunities (to team up) and challenges (to beat the opposition) – and these are themselves core parts of the gaming experience.
How does the willingness to pay for virtual goods vary across different demographic segments, or between different types of games?
We’ve seen a good willingness to pay across all our different demographics and games. In general, around 90% of our users will play the games without spending any money, and the remaining 10% will pay for goods.
With regards to virtual goods, what price points are we typically talking about here? How does it vary?
The individual items are priced from just a few cents up to a few dollars depending on the in-game value of the item. For example in Farmerama, you can buy some lettuce seed for less than a cent or splash out on a pigsty for around $6.
How important are analytics to your business, and more broadly, to marketing social games online?
Analytics are obviously very useful as they allow us to see which games are the most popular, and what aspects within these games are proving the most successful. This then informs how we update the games, and what features we include in new games.
What metrics does the gaming industry typically use, and how do these inform your products and services?
Within the industry, a number of different metrics are used to measure the level of engagement of games. Casual game developers look at daily and monthly active users (DAUs and MAUs) – and the ratio between them which determines a level of stickiness.
We look at a range of conversion metrics – visitors to registered users to active players to paying customers – which many online businesses look at. We also look at session length and do extensive cohort analysis to determine behaviour amongst different user groups.
Most of your games are in-browser or web-based as opposed to on Facebook. What are some of the advantages and disadvantages of hosting games on the Facebook platform, and why did Bigpoint decide not to go down this route?
We do offer games through Facebook, but instead of having a Facebook-only strategy we prefer to offer our games more widely. This is for a number of reasons, chiefly that we believe the potential audience of in-browser or web-based games are so much greater than just through Facebook.
Ultimately, every internet user has a browser, whereas only a percentage of these users will access and regularly use Facebook, and this is particularly relevant when you look at emerging markets that have proprietary social networks like Hyves etc. In the end, Facebook is only one source of traffic, and not one that will allow you to reach all audiences.
We also believe that there are risks of having a Facebook-only strategy as you are relying on another party to reach your audience, and they can choose to change the parameters without consulting you, which could have a detrimental effect on your user numbers and revenues.
Why do you no longer have display advertising on the site, and why didn’t it work for you? Will you go back to display advertising in the future?
We discovered that cross-promoting our own games was a more valuable use of advertising inventory than selling it to third parties. However, we won’t rule out returning to it in the future.
Have you experimented with in-game advertising? Is this an area you expect to develop further in the future?
We are looking at in-game advertising as we believe that it can help brands get even closer to their target audience as they are placing themselves into their online life. We can also get our customers to interact with the brand which can help create positive associations. Of course our main focus is on delivering the best possible gaming experience for our users so any in-game advertising or branding would have to add to that.
How much growth potential is there in the browser-based games space?
We think that there is huge growth potential in browser-based games. Ultimately, we believe that the gaming industry will move online as bandwidth restrictions begin to ease, and it is much easier for users to access and play games through the browser than having to download it to their own system.
What do you see as the major challenges now facing the casual gaming industry?
The casual gaming industry is seeing a massive boom at the moment as more and more people across the world go online. So, in terms of challenges, there’s obviously increased competition for a consumer’s mind-share but we’re confident that our games are engaging and interesting enough that consumers will choose to play Bigpoint games rather than competitors.
The second challenge is understanding how best to distribute games: there are hardware questions (PC, touch-screen tablet, mobile phone) and there are platform questions (open browser, Facebook dedicated games aggregators etc.). The key is to focus on consumer behaviour and how that is affected by the platform on which they are playing. And thirdly, there is the continued challenge of innovating in the games themselves.
How big is the mobile / smart phone / iPhone or iPad / tablet device opportunity for social gaming?
This is a huge opportunity for social gaming, as users can now play their games wherever and whenever they want. We believe that ultimately they will want to play games no matter which platform they are on, so we’re beginning to develop cross-platform games that users can play on their iPhone, iPad and PC.
Clearly the form factor of the device will determine much of the experience. Touch screen interaction (as on a tablet) will be a big opportunity to widen the scope of the games we are offer, the consumers we target and the moments in their days when they will play.
And finally, what does the future hold for the social gaming industry?
We believe that it’s a bright future. Gaming is a part of everyday life whether or not consumers describe themselves as gamers. There are still all kinds of consumer and game segments to be mined – we are only at the start of this.