Playfish hooked on Facebook

Playfish hooked on Facebook
Michael French

By Michael French

October 10th 2008 at 2:14PM

SPECIAL REPORT: London-based team is responsible for some of the biggest social games apps

Just a year after its founding, London-based studio Playfish has stormed the Facebook charts to produce four of the top 12 games on the site ­– and says its success proves studios can make money developing games for social networks.

Playfish is responsible for five games on Facebook – Who Has The Biggest Brain?, Bowling Buddies, Geo Challenge, Pet Society and and Word Challenge – and has over 20m registered users, 1.5m of which play in any given day. This huge number of players account for billion minutes of engagement in a month, the company says.

The firm, founded in October 2007 by former Glu Mobile boss Kristian Segerstrale, has $4m of investment backing and has opened development offices in San Francisco, Norway, Beijing to support its London HQ. Segerstrale said that the company’s fast success was proof that there is a viable market in a space much talked about but also brushed off with some scepticism.

He told us: “We’ve been very, very happy with our titles so far and have been encouraged by both the consumer uptake – in terms of the sheer amount of consumers reached to date – as well as some of the early signs of monetising that audience. We’re at a very early stage of what we think will be a huge market.”

Taking the free to play model to heart, social network games use the friends lists of their respective platforms to compare scores and encourage competition. Segerstrale says that money is then to be made through in-game transactions, item sales or charging to unlock features with ancillary revenue coming from sponsorships and ads.

And by rejecting pretty much everything about the ‘traditional’ games industry, Facebook games and the like have found a market of their own. “The social games market demographic is aged 18 to 34 and split 50/50 male and female. It’s a very new audience in some ways and an audience which we as the games industry haven’t managed to reach before.

“And rather than trying to force people to define themselves as gamers and make them come to us, digital networks are the hang outs where we can take games that they can discover for themselves. It really does help you reach consumers who would never have thought of themselves as gamers, and that changes the business model and the production model,” he said.

Some things are reminiscent of already-established areas of the games industry, however. Segerstrale predicts that in time the industry will get close to spending similar costs like those on mobile platforms for basic games pre-porting (around the $100,000 mark), and that it won’t be long until a game costing beyond the watermark $1m mark to produce appears on Facebook. Certainly, there is money splashing around from the VC space – even in the midst of an economic crisis – with investors keenly backing social games companies in the US. Zynga this summer announced a $29m investment boost, while Social Games Network has scored the backing of Amazon founder Jeff Bezos.

But exploiting the differences between this new market and the old guard are what is key. “There are a lot of interesting differences to other games – such as the emotional driver, which is why people play a game on a social network, or why they pay to access a feature,” Segerstrale added.”Some play games as a form of expression, it’s a social need. And the demographic is so different from other ‘normal’ types of games, online titles certainly – including casual titles which are regularly for females over 35.”

And with all Playfish’s titles being new IP, it’s clear social games are also better at driving consumers towards embracing new properties. It’s a key point when Facebook’s most high profile game so far, Scrabulous, has also been its most controversial due to property rights issues. The Scrabble-aping title was taken down earlier this year after legal action from rights holders Hasbro and Mattel.
“The fact that 95 per cent of distribution in social games is viral means that perhaps brands don’t have the same inherent advantage that they have in the rest of the games industry, which is more catalogue-based and upfront payment based. It’s quite a different adoption decision than standing in front of the top ten shelf in GAME trying to decide which one to buy.

“I’m not suggesting that IP won’t be significant in social games – it’s still in its infancy and we have a very long way to go still as an industry – just saying that licenses are likely to be less significant than games in a traditional retail environment.

“All the games in the Facebook top ten are new IP – that surely says something.”

But perhaps most important is the fact that social network games are an opportunity ready to happen, and not something that requires waiting or investment on the industry’s part. Added Segerstrale: “Unlike mobile games or other parts of the video games market, we’re not waiting for anything to aid our market – not handsets or broadband penetration or new Nintendo consoles. The only thing we are waiting for is our execution as an industry. It’s an interesting place to be.”