Patricia Wagstaff, ITV Studios Director of Digital Productions

GOT GAME?

 

Tetris was released on Game Boy in 1989 and proved that a game did not have to be narrative-or character-driven andhave a production budget in the tens of millions and a marketing budget to match. Over 20 years later Tetris is still a dominant game title online, on consoles and on hand-held devices, having sold over 100 million copies worldwide for mobile phones alone since 2005! Its continued success is attributable to four things: it’s a very simple game to play, requiring only one key stroke or mouse-click and no instructions, it can be played in short bursts, it has an exhaustive number of levels and, it is addictive.

This style of game which was coined ‘casual’ sometime in the late 90s, describes a game that was created for a mass audience, consists of 2-D graphics, and is most often free-to-play (for starters anyway).  There have been numerous successful casual gaming titles that have followed in the wake of Tetris and been ported to multiple devices and platforms, including Bejeweled,  Microsoft’s Solitaire, Diner Dash, Peggle and many, many more. These games were initially distributed online via a select number of distributors, online gaming destinations and ISP portals such as RealArcade, Oberon Media, Big Fish Games, MSN Games, Yahoo! Games, & Pogo.com, and were monetised through in-game advertising, subscription or via a downloadable for-pay ‘deluxe’ version. The games were designed to have broad appeal but a new casual gamer appeared; the middle-aged female.

It wasn’t long (sometime around 2000) before major brands saw the opportunity to use this new(ish) flash-based game form as a way to combine advertising with entertainment for the purpose of promotion, education, and as a recruitment vehicle. As a result, these ‘advergames’ became an important marketing tool for brands looking for increased consumer engagement and purchase intent, brand awareness, customer data/feedback and repeat visits to their websites. As the advergaming market took off there were only a limited set of online game portals willing to publish these types of games and the distribution of the games beyond the brand’s website became an art form in itself. Brands were increasingly being asked to pay for distribution – although promotional costs weren’t even a fraction of those for console games, they did often become a multiple of the game development cost itself and as a result, brands were becoming ever reliant on word of mouth or viral marketing in an increasingly fragmented media space.

Casual games initially featured ‘match 3’ style games (with multiple copycat variations on the theme) and familiar card, board and pub formats but gameplay did evolve over the years to include other formats such as action, strategy, resource management, sim, and hidden object. Many casual games, even puzzle and strategy, began to introduce some form of basic text-based narrative. Where most games were still developed in 2-D, games did evolve to become more robust with better graphics, sound design, more levels, the addition of multi-player features and social elements such as leader boards and chat, but remained largely a single-player experience.

The vast majority of these casual games were based on original intellectual property and there were very limited brand opportunities beyond traditional ads (often 30 second TV ads that were hard-coded or streamed between levels or display ads on the webpage). Casual games and advergames co-existed but it wasn’t perfectly harmonious – with differing objectives (for-pay, publishers allowing free-play for a defined period before the up-sell vs. free-to-play) and the gaming portals controlling a closed distribution system, the business of casual games would prevail and advergames lost promotional ground.

Fast forward a couple of years to 2010 and although some of the ‘classic’ casual game titles such as Bejeweled and Solitaire are still very much alive and well in some form, the new game hits have titles such as FarmVille, Pet Society, Mafia Wars and Café World and are played via social networks including Facebook, MySpace and Hi5. These ‘social’ games are capturing tens of millions of mainstream users, people who do not consider themselves gamers – exactly the audience that was the growth path for the casual games market, which continues to face a challenging future due to lack of innovation and spiralling price points. These new games are still 2-D, simple to play, addictive and fun but, they are free-to-play, social, with numerous ways to play with or against ‘friends’ and the wider social network base, and make money on the principle that a small number of players will ‘convert’ to paying customers and purchase and/or gift virtual goods, accessorise their avatars (in-game personas), or pay to advance through games or levels. These games are the new generation of Massively Multi-player Online games (MMOs) and are not played by the traditional spotty-faced teenage gamer locked away in their bedroom but are increasingly being played by women, 25-45 years old, at home and at work.

Facebook, unknowingly to start, was the platform that over the past two years was at the forefront of this massive shift in who plays games, how games are discovered, distributed, designed and operated.  The developers are the publishers in this gaming model and through these ‘open’ social network platforms, many of the most successful games are achieving daily plays in the millions, and annual revenues to match. We’ve also seen the emergence of a ‘Big 3’ in game developers - Playdom, Zynga and Playfish – and lots of venture capital investment. Electronic Arts, a major game publisher, recently acquired Playfish for $400 million. With some of the highest engagement figures that online entertainment has ever seen and continued growth on social networking sites (Facebook boasts to have over 400MM active users worldwide, as of Feb 2010, with YoY growth of over 25% internationally), it’s clear that not only are social games impacting businesses across the media landscape but there are substantial opportunities for game developers, marketers, content owners and brands. Where the casual games market didn’t wholly accommodate branded games or product placement, social games are a perfect vehicle for brand integration, with multiple interesting consumer touch-points available already. 

What should be of particular interest to brands is that social games are using special events as a time when virtual goods and real goods interact – for Mother’s Day this year in the US, FarmVille teamed up with ProFlowers.com to offer 100 Farm Cash (FarmVille virtual currency) to players that ordered flowers through the game. It’s only a matter of time before games encourage consumers/players to exchange virtual world behaviour for real-world value e.g. where discounts & vouchers are won in-game and can be used for out-of-game purchases in the real world. Another interesting trend is that major advertisers are starting to pay game publishers to market virtual goods’ offers to players. These offers include virtual goods provided by brands, free to the consumer, as well as providing players with free virtual currency if they become friends of their fan pages or view a video ad in-game. Gamers are spending between 45 – 90 minutes a day on social games and large advertisers such as Microsoft, Sony and McDonalds are already running virtual goods’ campaigns to try and reach their target customers on social networks. Expect the trend to continue where online ad spend is directed more towards social media and away from traditional online publishers, as advertisers look for better and more meaningful ways to engage and interact with consumers beyond display.

Social gaming has seen phenomenal growth over the past two years and although revenue models and brand opportunities are maturing, there are still many opportunities for developers and brands to innovate. Although Facebook will continue to be a key social gaming destination, in order for game developers and brands to see increased growth and not be reliant on one platform alone, distribution will need to expand to include other social networking sites and services such as MySpace, Hi5, Tagged, Gowalla, and Foursquare (and any other newcomer(s) that pop-up in the next 6-12 months).

Here’s to Round 2 in social gaming and the hope that we may see more innovation than was delivered over the last decade in casual gaming, that content owners with iconic and recognizable IP enter this space, and that commercial partners embrace the opportunities presented to establish a more meaningful and fun way for consumers to engage with their brands.

ITV has ambitious plans to play in this arena and expects to make a significant announcement in the near future …WTS!

Patricia Wagstaff, ITV Studios Director of Digital Productions