Sramana Mitra: I would like to spend the next segment of the interview double-clicking on those two areas. Tell us what you see happening in the casual gaming world. What does the lay of the land look like? What are the trends of the casual gaming space? We should talk both about web and mobile and separately. Then we’ll do the same thing for the in-chat gaming industry.
Martin Rosinski: In the case of the casual gaming industry, we’re seeing a wide array of game releases that are being made with beautifully executed visual concepts. It’s only matured as a result of the advent of higher-powered portable mobile devices that are relatively inexpensive. There’s an explosion of titles across genres and things are looking exciting and promising for the industry. One of the gaps that we noticed in what’s happening at the moment is there is this landscape of disparate games that users play but often felt relatively lonely in that gameplay. For the type of casual gaming genre that we operate in, we >>>
Have you heard of in-chat gaming? Read on…
Sramana Mitra: Let’s start with some introduction about yourself as well as Palringo.
Martin Rosinski: To give Palringo’s quick story, I founded Palringo close to 10 years ago. In August, Palringo will be celebrating its 10th birthday. It started out back when mobile apps and the idea of installing software on your phone was in its infancy and beginning to develop and take off. Back then, users would have to use clunky serial cables to install software. Nonetheless, it was quite evident that the potential for third-party apps that go over-the-top of network operators and unlock a lot more potential in mobile devices was there.
When Palringo started, its initial mission statement was to create a product that emulated a walkie talkie or an opportunity for users to communicate using short voice messages but with no limits regarding distance and allow these users to hold global conversations by voice across continents. We raised an initial seed round. It was £650,000 to explore that concept. >>>
Sramana Mitra: What kind of games are they playing when you talk about gamification. I think what you’re saying is the concept of games as a method of sales training, yes?
Duncan Lennox: I think it’s a lot more than that, but that’s certainly a key part. When you talk about gamification, it’s important to drill into it a little bit. Because there’s a lot of people talking about gamification, but they don’t really know what they’re talking about. It’s a marketing exercise because it’s a hot topic. When we talk about it, we mean using proven scientific techniques to engage people and get them to participate in your application. It’s not meant to be cutesy or novel. It’s not meant to be a trick. How do we make the process of engaging in our application fun and interesting for them to participate? If they then participate, with the science and the way our methodology works, we will get the long-term retention and behavior change. >>>
Sramana Mitra: How many games have been funded on the various crowdfunding platforms?
Scott Hartsman: I wish I knew the answer but I’m afraid I don’t.
Sramana Mitra: Is it hundreds or thousands of games?
Scott Hartsman: The order of magnitude, at this point, I would say is around hundreds. I would say there are hundreds of campaigns. I do not know how many of them actually have succeeded and got funding, and from there, turned into shipped products. One risk >>>
Sramana Mitra: You’ve said several times that one of the organizing principles of your portfolio is that you want the business model to be fair for the customer. Can you talk about this a bit? You are coming from where the customer will subscribe into your games and you started monetizing right away. Now the world has moved to free-to-play, you don’t monetize games right away. It has a gestation period and you start monetizing later. How do you determine what is fair? How long does it take to reach the level of monetization that you were earlier monetizing at? What are the economics of the business now?
Scott Hartsman: Let me start out with the highest philosophical point. Here’s how I think of things in terms of fair and how we think about them internally as a whole. There are two ways to think about the psychology of sales in free-to-play games. Number one is when I pay for a thing, I get a thing that I genuinely value and that I’m happy for. >>>
Sramana Mitra: When you are working with third parties who are developing the games, and you are going to publish them as part of your core business, how do you determine which ones you want to bet on?
Scott Hartsman: It’s the kind of methodology you would actually expect out of a game developer because that’s really what we are here. I was a game developer long before I was an executive. At our core, we are a company of gamers. We love games and we love playing them. So the first thing we do is we test them out internally. ArchaAge, for instance, was in playable form before we signed it. It was more of, “Let’s rally the troops, and see if we are genuinely excited about the kind of game this is going to be. Can we see the success path?” Then we look at the developers. Are they going to have the ability to create the AAA experience that we want to ship?
Sramana Mitra: Are there developer tools out there that a Joe Developer can afford to develop on and are high quality tools?
Scott Hartsman: Yes, these are definitely commercial-grade high-quality tools for a far smaller price point.
Sramana Mitra: How many of these are there?
Sramana Mitra: Rift started with a certain storyline. You were basically allowing people to subscribe to the game and play however long and in whatever way they wanted. When you introduced free-to-play, obviously that storyline had to accommodate that model of commerce in the game. Can you talk about that in concrete terms?
Scott Hartsman: The overall goal was to provide a premium experience at a free-to-play price point. With that in mind, we intentionally adopted a strategy of making sure that the entire content, story, and physical locations of the game would remain free-to-play at all times. Then, on top of that, we would have a micro-transaction store that housed a bunch of purchases the players could make if they chose to support the game further. We typically break down those items into three categories: convenience, cosmetics, and the ability to catch up to your friends. >>>