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Postcard from the 2005 Casual Games Conference


August 3, 2005
 

An historic event took place July 19th in the small but growing corner of the game industry known as casual games; the first ever Casual Games Conference was held in Bellevue, Washington. My company, Large Animal Games, has been developing downloadable games for the casual game market for about four years now, so this was a must-attend for my business partner Josh Welber and I. We caught a cross-country flight out of NYC on Monday afternoon. What follows is my perspective on what happened over the next few days.

12:00 Midnight - Arrival at our hotel in Bellevue. For some reason, the door to our room is the only door on the floor that is painted bright red with green trim. Apparently, we've been given the Christmas Suite.

8:00 AM - Breakfast in the hotel restaurant with the other members of the Casual Games Special Interest Group (SIG) steering committee. This new IGDA SIG was formed over the last several weeks by a number of folks from the Online Games SIG. Over breakfast, we discuss changes to the new SIG website (http://www.igda.org/casual), the recent release of the Casual Games Whitepaper and the Casual Games Quarterly, plans for tomorrow's conference announcements, and the cocktail hour we've organized for Wednesday after the last conference session. We pay the tab and head over to the Meydenbauer Conference Center just a few blocks away in lovely downtown Bellevue . After years of attending GDC in San Jose, I'm surprised to find another city so entirely corporate and uninteresting. Although, it's possible that all the soul has just moved out to the suburbs.

9:30 AM - A few hundred people are already at the conference center when we arrive. There are lots of familiar faces; all of the distribution channels, publishers, and top developers from the casual games space are here. Large Animal does business with a good number of these folks, but almost entirely through phone calls and email, so it's great to see them face-to-face.


Figure 1: Daniel Bernstein from (Sandlot Games) chats with Nicole Lazzaro (XEODesign) as John Welch (PlayFirst), Shelley Olhava (NPD Group) and others look on.

10:00 AM - After announcements by Cynthia Freese (of The Game Initiative, the conference organizer), and Jessica Tams (the chairperson of the Casual Games Conference Advisory Board), the conference is officially under way and the first panel of the day begins. Entitled simply "Multiplayer," this panel is moderated by Jay Moore from Garage Games, who starts off by introducing the five panelists; Daniel James (Three Rings Design), Jim Greer (EA/Pogo), Pasi Ilola (Sulake Corp.), Jiho Song (CJ Internet), and Susan Choe (NHN U.S.).

Since most of the panelists are from the MMO world, much of the discussion centers on that particular flavor of multiplayer. Susan and Jiho talk about the prevalence of the item-sale business model in the Asian market, and Pasi mentions that his company's popular Habbo Hotel brand generated 16-17 million (USD) in revenue last year, primarily from the sale of virtual furniture in the game. Later in the panel, Daniel James mentions that his company is currently experimenting with item sales in their game Puzzle Pirates , and that they are rolling out virtual furniture soon. This prompts a smirking Pasi to ask with a smirk, "Where did you get the idea for that?"

When the panel is asked to give a prediction about where the casual games industry will be in five years, Daniel offers that "the business of $20 downloadable games will be gone. It's a dead-end." Susan Choe counters, "That business may be a dead-end, but right now it's a large, revenue-generating dead-end."


Figure 2: Margaret Wallace (Skunk Studios) and Nick Fortugno (gameLab) smile as Adeo Ressi (GameTrust) makes some other sort of expression.

11:00 AM - My partner Josh and I have a bunch of meetings, so we have to miss the next session, "Developing for the Sony PlayStation Portable and Nintendo DS". Sounds interesting, but our shop is focused on PC downloadables. Luckily, I run into my friend Will Leong (Kogasoft) just as the session is letting out and he gives me his impressions. What Will found most interesting were the development budgets for the different platforms and categories of games. Specifically, he said that according to the panelists, the PSP budgets are $2-$4M and project lengths range from 12 to 18 months. The DS budgets mentioned were about half of the PSP ($1-2M) and 7-12 months. According to the panelists, development teams on both platforms range from 5-25 people.

12:30 PM - Sandlot Games is the kind sponsor of the conference lunch and Josh and I sit with Stephan Smith (FreshGames), Juan Gril (Joju Games), and Rich Roberts (PlayFirst).

1:30 PM - We all move back into the theater for a panel on "Alternative Business: Marketing Models". Moderator Joel Brodie (JoJu Games) has subtitled his panel, "The 2 Billion Dollar Question." Joel points out that the casual games industry has beaten analyst expectations for growth and is expected to generate $700 million in revenue next year. He asks the panelists how this segment can reach $2 billion in the next few years.

Colin Cardwell from 3rd Sense, an advergame developer from London/Australia suggests that integrating branding into games is a promising business model. Paul Thelen from Big Fish echos that sentiment, saying, "Advertising is making a comeback." Hugh de Loayza from EA points out that subscriptions have proven quite successful for Pogo, which now has over 800,000 paying subscribers. Duncan Magee from RealArcade says that there are unexplored opportunities in direct-to-retail; "drugstores, set-top boxes, etcetera. Wherever you find these customers is where we need to put our games."

When asked about the challenges facing multiplayer games in the casual space, Richard Krueger from Boonty opines that, "Casual gamers are all about the independent, single-player experience." Duncan agrees that most casual gamers are probably not looking for an ultra-competitive experience, saying, "I don't think I've ever heard my mom say, 'I wanna go kick someone's ass!'"

When asked what casual game developers can learn from developers in the traditional video game market, Hugh from EA urges developers to "think about your content on multiple platforms. Ask yourself, 'What are the right platforms for this game?'" Paul Thelen from Big Fish suggests that publishers don't have the role that they do in the retail space, and that developers can bring a game to market on their own. Shaul Olmert from Nickelodeon bemoans the fact that many developers in the casual games space are also distributors, or publishers, or some other combination. He encourages businesses to instead "focus on what they do best." Colin Cardwell encourages developers to start thinking "from day 1 about how you can develop and extend" the intellectual property you create.

Hugh and Shaul have an interesting exchange at one point. Hugh points out that one of the informal metrics they employ at EA/Pogo to determine whether a game will be successful is to see whether people from around the office are playing it. Shaul contends that "that is the wrong way to go about testing and misses the whole point of research."

At the end of the panel, Joel asked the panelists to give one word that they think is key for success in the space. Here are their answers:

Richard Krueger from Boonty: "Quality"
Paul Thelen from Big Fish: "Addictive"
Hugh de Loayza from EA: "KISS (Keep it simple, stupid)"
Duncan Magee from RealArcade: "Accessibility"
Colin Cardwell from 3 rd Sense: "Competition"
Shaul Olmert from Nickelodeon: "Testing"

3:00 PM - I catch the last half of the afternoon panel on advergaming. The panel features a solid cast of characters; Alex St. John (WildTangent), Peter Glover (Shockwave), Brian Robbins (Fuel Industries), Alan Miller (Skyworks), and Shawn McMichael (Microsoft Casual Games), with Robb Lewis (Trymedia) moderating.

When asked about the budgets for advergames, the panelists seem to agree that the sweet spot is around 200-300k, with higher-end projects going up to 2 million dollars. Brian Robbins pointed out that 30-50k is the smallest budget that they tend to work with at Fuel.

There was some disagreement over the quality bar that users expect from an advergame and how to achieve it. Alex St. John was adamant about players expecting console-quality graphics and suggested that WildTangent was the only way to meet that expectation. Everyone else on the panel seemed to disagree, both about user expectations and the choices in web-based 3D display technology. Both Shockwave 3D and Virtools are mentioned, but unfortunately, this discussion ends up getting cut short due to time constraints just when it's starting to get good.

4:15 PM - Puzzle-meister Scott Kim wraps up the day with a presentation entitled "Creative Plagiarism: The Dangers & Delights of Making a New Game Based on an Old Game" Seems like an ideal topic, given the amount of completely derivative games that the casual game industry has turned out in the past 4 years. However, this presentation is not about the legal aspects of copying game mechanics; it's about the design considerations that come into play when creating a game based on of an existing title. Scott's starts his presentation off with a quote from T.S. Eliot; "Immature poets imitate; mature poets steal."

Scott goes on to highlight three important areas to consider when thinking about creating a sequel: change something, fix something, or balance complexity. He draws comparisons with film sequels like Shrek 2 and also with his work creating a sequel to Rush Hour, the board game. Sadly, Scott misses an opportunity here to mention Rush Hour, the movie, which would have helped make the point that sometimes you're much better off not making a sequel. (And by the way, what ever happened to Chris Tucker?)

5:15 PM - Microsoft Casual Games sponsors open bar and hor d'oeuvres in the lobby, so we hang out and network for a while. I'm lucky enough to meet George Fan from Flying Bear Entertainment, creators of Insaniquarium, one of my favorite casual games. After a microbrew and a half-dozen spanakopita, we head over to the PopCap party at Rock Bottom Brewery. I'm told that this is the first industry party that PopCap has ever hosted, so I feel privileged to partake of the free nachos.


Figure 3: Daniel James (Three Rings) and Dave Haas (PopCap) discuss their love of stripes at the PopCap party.

11:30 AM - James Gwertzman, one of the founding partners of Sprout Games and the new Director of Business Development at PopCap, is the moderator of this much-anticipated panel on Contracts & Royalties. As in most sectors of the game industry, the different players in the casual game "value chain" do not always see eye-to-eye on the way that revenues are shared. The point of this panel is to discuss the different perspectives of developers, publishers, and distributors. James starts out by showing a slide of a EULA ("End User License Agreement") that read as follows:

"This agreement is between the Contracts & Royalties panel of the Seattle Casual Games Conference ("Panel") and you, the audience ("Audience"). By remaining in your seat and not getting up to leave at this point, you hereby agree to the following terms, as of the effective date July 19th, 2005.

If the Panel can agree unanimously to a set of royalty rates ("Rates") that it deems fair, then Audience hereby agrees to adapt the Rates as appropriate in all licensing agreements going forward, and the Audience also hereby agrees to renegotiate all outstanding agreements using the Rates as appropriate.

If the Panel cannot agree unanimously to a set of rates, then this Agreement shall be rendered null and void."

This was a light-hearted way to kick off a potentially contentious panel. James has asked each of the panelists to prepare a diagram of the way they think revenue should be split among different participants in the downloadable game value chain; developer, publisher, distributor, retailer, and DRM technology provider. Predictably, these diagrams differ substantially depending on whether they are coming more from the developer perspective or from the distributor/publisher perspective. The amount of overlap among the different roles in the downloadable games space makes a clear comparison of the varying perspectives difficult. Many of the more established game developers are able to fund their own games and have direct relationships with the portals that sell their games. Some of these also have a significant web presence of their own and need only share revenue with a third-party DRM provider. Newer developers, on the other hand, may need the assistance of a publisher for funding, product development, distribution, and DRM.

While the panel does have its share of entertaining disagreement, it also ends with little resolution. What it does make clear, however, is just how much this is a discussion that this young segment of the industry needs to have. Neither side seems to fully understand and/or appreciate what value the other side is bringing to the table. I make a note to myself to explore this topic in a future issue of the Casual Games Quarterly.


Figure 4: One of the slides from the "Contracts & Royalties" panel at the 2005 Casual Games Conference.

12:30 PM - Josh and I have another batch of meetings to attend, so we miss the panel on Wireless casual games. My friend Juan Gril (JoJu Games) was on the panel though, so afterwards I grill him for a recap of what I'd missed. He tells me that one thing that all the panelists agreed on is that casual games and cell phones are a perfect fit. Juan goes on to say, "Some action games are successful, but all the sales charts indicate that casual gaming will prevail on the mobile platform."

2:00 PM - I am moderating a panel at 2:30 , so I meet up with my panelists ahead of time so we can get our story straight. Ed Allard (formerly of Sprout, now at PopCap), Nick Fortugno (GameLab), Garrett Price (HipSoft), David Rohrl (formerly of EA/Pogo, also now a PopCapper. noticing a pattern?), and I meet on the outdoor balcony of the conference center. The rare Pacific Northwest sun is shining and there is a fantastic view of snowcapped Mt. Rainier . I give everyone a quick rundown of the questions I plan to ask and we make jokes about staging a violent disagreement on stage. Unfortunately, I think this group of experienced casual game designers sees pretty much eye-to-eye on general design issues, so there is little chance for the kind of fisticuffs that would put this panel in the history books. Nonetheless, I know these fellows will have plenty of interesting tidbits to share with the audience.

At 2:30 , we make our way down to the theater and get situated on stage. I kick things off with some questions about production values in the casual games segment and all the panelists agree that they have increased significantly over the past four years and continue to rise. There is some talk about whether this is happening as a result of consumer expectations or simply as a result of developers trying to differentiate their titles.

We move into a discussion of the casual game audience and how these designers make sure that they are creating games that will appeal to them. The panelists mention the oft-quoted demographic of 40 year-old women, but are in agreement that they are really designing for a much broader group. The potential audience for these games is, after all, just about everyone with a PC.

Ed Allard mentions that he goes out of his way to understand this demographic and to explore the things that appeal to them. For example, he'll listen to a talk radio station, or watch a movie, or read a book that he knows is popular in the mass market.

Dave Rohrl explains that he focuses particularly on the first 2 minutes of the experience, and makes sure that the player can immediately grasp the gameplay and start feeling successful within that period.

When asked how they think about innovation and imitation in their studios, Garrett Price explains that at HipSoft, they try to strike a balance between more conservative games, which are inspired by existing successes, and more innovative titles, which are risky, but have the potential to pay off big. Dave Rohrl expresses amazement at the casual game audience's tolerance for imitative gameplay, and Nick Fortugno explains that at GameLab, "we are entirely focused on creating innovative games."

We go to questions from the audience and the conversation turns to the issue of getting women more involved in the development process, particularly since they make up a huge portion of the casual game audience. Everyone on the panel (myself included!) agrees that we'd love to have more women involved in the creation of our games, but that it's much more difficult to find female employees who are motivated to work in the game industry. An audience member points out that many women simply don't know about the opportunities in game development, and that we might try appealing directly to schools in order to drum up more female applicants. On that excellent idea, we end the panel and I go outside to jot down these notes.

5:30 PM - Casual Games SIG mixer - Josh and I head over to Bellevue 's Taphouse Grill for the Casual Games SIG happy hour. Many conference attendees are already on their way to the airport, but there's a good turn-out nonetheless. Everyone is a bit hoarse from over-networking, but in good spirits nonetheless. I run into Jessica Tams and ask her how she thought the conference had gone.

"Especially considering this was the first year, I'd say it was an overwhelming success. We had 482 attendees, which far exceeded our expectations. We think that the stellar speakers and panelists had a lot to do with that, as well as the fact that the event offered plenty of networking and enabled attendees to interact directly with industry leaders."

11:30 PM - After sampling a wide range of local micro-brews and meeting a bunch of developers who are interested in getting more involved with the Casual Games SIG, Josh and I head back to the Christmas Suite. It's been a productive 48 hours for Large Animal. It was great to have a more focused conference that brought together all of the decision-makers in our industry. Maybe next year they'll consider Honolulu for the venue.

______________________________________________________


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