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Interview: How Sulake Keeps Habbo Going Strong After The Virtual Worlds Bubble

Interview: How Sulake Keeps Habbo Going Strong After The Virtual Worlds Bubble

April 8, 2011 | By Leigh Alexander

What's commonly referred to as the "virtual worlds bubble" has come and gone, but after over 10 years in operation, Habbo, Sulake's online world for teens and tweens, just reported a record year, with 2010 revenues up 20 percent over the year previous.

"It's actually a combination of quite a few different things," Sulake's Teemu Huuhtanen, executive vice president of Business Development and Communications, tells Gamasutra.

In addition to expansions to Habbo's virtual pets, which were first released in early 2010 -- users can obtain different animals and train them -- customizations to Habbo's virtual marketplace have been key.

The game's 11 million monthly active uniques can now view long-term pricing trend data, and set their own prices for virtual goods that they sell. "That boosts the economy that we have, as far as taking a small cut from each trade," says Huuhtanen.

The biggest factor, though, was putting tools into the users' hands. Habbo users can now purchase their own toolsets to develop their own minigames, based on the basic chess-and-checkers style structure the game has been offering for years.

"There was the tremendous effect of not having just one kind of official game, but thousands of different customized games based on one idea," says Huuhtanen. "So obviously, that creates so much more to do in the environment, and the users have to buy the tools to create the games."

In the company's view, that encapsulates one of the biggest changes for the service: "If you look at some of the other social games... they're driven by the game developer," Huuhtanen notes. "So even though in Habbo you can get to a new level and gain achievements, it's really more based on the fact that users can create the games and different things to do."

"No matter how we try to be creative, they always come up with better and more creative ways," he reflects.

It's notable that Habbo continues to evolve and sustain its users and revenue in an environment where avatar-based social interaction isn't the hotspot that it once was. A few years ago, virtual environments geared at young people sprung up by the dozen, backed by plenty of venture capital and advertiser partnerships. But where many of them have dropped off the radar or failed to sustain their hype, why is Habbo still a success story for Sulake?

"There were way too many companies creating what everyone wanted to call 'virtual worlds,'" agrees Huuhtanen. "We didn't call ourselves 'virtual worlds' when Second Life popped up; we were talking about Habbo as a game. But then different media wanted to compare Second Life to Habbo, and we kind of got the label."

"In our opinion, Second Life probably is a virtual world, because it's realistic 3D graphics, and your avatar looks like a real person," he reflects. "But Habbo has always been a game, and I think a lot of people just got confused."

"We kept our eye on the ball... we are a social game, because Habbo is all about synchronous play -- you interact with other real people. Most of the Facebook games you really don't interact with other real people other than you're asking for help or you want somebody to be your neighbor," Huuhtanen adds.

The rise of Facebook gaming has only benefited Habbo, he suggests -- because people become accustomed to playing socially with one another, but the synchronicity of the Habbo world is a very compelling next step after the asynchronicity of most Facebook game situations.

"We see that as a huge opportunity for us, now that everyone is getting used to playing social games," he suggests. "The fact that you can find them on Facebook really only helps us -- moms are getting used to playing these games and also paying for them. It's much easier for our teens to go to their moms and say, 'hey, I'm playing Habbo and would love to spend 10 bucks to build this game,' and the mom would most likely now understand why the teenager was asking for the money and what the game is."

"And the fact that tweens and even kids are getting mobile phones so early, that also helps -- you know, they know how to use the internet, they know how to use the games earlier and earlier," Huuhtanen adds.

Now the company is looking more closely at the mobile space -- for the second time. Habbo launched mobile companion apps back in 2006 and 2007, but it proved to be too soon: "It was impossible to have your game on even 20 percent of the different available handsets," Huuhtanen reflects. "There were too many OSes and so on. But now that you have really Apple and Android, it's so much easier for us to address the mobile market."

"We're going to first tackle iOS," he adds. "We're -- knocking on wood -- hoping it happens this year, so that's under development and we will go from there. We have done a prototype of Habbo for tablets -- it's for the Android platform -- but it's not ready to be put out there. Then again, for our tween and teen users, there's no penetration for tablets, not enough for us to put it out there yet. But we're experimenting and developing it."

But iOS mobile phones remain a "growth area" for the company, Huuhtanen says. "Now that we've seen how well the user-customized games work for our users, that's an area we're going to be developing further, and introducing new elements and features."

Plus, although the game is available in 11 languages and in more than 150 countries, there are still unexplored international markets for the company that present opportunity: "We still have big markets in Europe that we are not targeting, like Poland and Turkey -- which are big gaming markets," says Huuhtanen.

So not only is further geographic expansion a priority, "I think we're getting better and better at understanding our users and doing the research on top of that," he adds of the company's plans for continued growth. And without even heavily leveraging the Facebook platform, the company's Facebook app sees close to 3 million monthly active uniques. And it plans to do more with the space over the next two months.

"We're definitely going to grow once we introduce all the features that we're used to seeing on the platform," adds Huuhtanen.

"It helps us develop the features our users want. It's going to be a combination of many things, and I don't think there's a silver bullet -- for us or for any of the companies. But we're confident that this year will hopefully go as last year went."

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