Given the incredible state of flux the games industry finds itself in these days, leveraging big brand names for your games may figure more importantly than ever as part of a smart content mix. Especially in the increasingly competitive social games space, anything a game developer or publisher can do to stand out in the crowd really matters – and having a familiar name attached to at least some of your IP may be one winning strategy. Recently, EA Playfish released its first branded soccer game, FIFA Superstars, to good numbers. In an interview about the game, Playfish Co-Founder Sebastien DeHalleux says he expects big brands to dominate Facebook in the coming months. Certainly, a lot of these forthcoming titles associated with big-name brands will fail, but it probably won’t be because of the brand name attached to them. Used correctly and under the right conditions, having a well-known brand in you corner can give you an edge. My Long Journey Back to Brands Brands haven’t always played such an important part in creating an ideal content mix for me. To the contrary, my entire career in the games industry has generally revolved around the creation of original intellectual property (IP). I’ve launched, marketed and distributed so much original IP that I’ve lost count at this point (I’m not sure if that’s a good sign, a bad sign – or a consequence of my attending too many industry parties.). Sure, I’ve also worked with many licensed brands, especially during my time at Shockwave, but I have always specialized in taking the enviable, and often fun, outsider position that big brands don’t matter. I can’t begin to describe how many panels, speeches, and media interviews I have given where I elevate the importance of IP ownership, eschewing any merits whatsoever in adopting a big brand strategy. After all, why should competent game developers and publishers spend their time, talent and energy building equity outside their company by focusing on big brand titles when owning and controlling one’s own IP allows one to be master of their fate? This fundamental belief, I’d always say, was especially true in the casual games world where digital distribution allowed for greater direct access to players from all around the world, circumventing an often unhealthy dependence that content creators had on traditional games publishers. Moreover, I used to say that big brands more than just don’t matter – they are a recipe for complete and utter disaster: a one-way ticket to rendering yourself irrelevant. I was the poster child for the position that creating a game based on a licensed property will water down the potential for making a good product, in addition to diluting any potential long-term upside for the content creator. It is a losing proposition, I’d say, no matter how you slice it. As much as I’d like to take exclusive credit for advancing this opinion – after all, this is the games industry and we all love claiming credit, especially for ideas that aren’t our own — it’s really not an entirely unusual position to take. Anyone worth their salt in casual (and now social) games generally stays focused on building brand equity inside of their own company. So, I really do get it: Possession is nine-tenths of the law as the old saying goes. Creating and publishing your own IP is the way to go, but in direct contradiction to my previous stance, it’s definitely not the only way to go – especially given all of the changes happening in the casual and social games sectors these days. In fact, I’d say joining up with a big brand, especially in the realm of social games, is not a terrible strategy as a means for reaching players, in light of all that’s going on in the space. Different Market Conditions, Different Rules From my standpoint, the games industry is in a bizarre space right now. The industry continues to be dominated on the one end by multi-year, big budget titles. On the other end, behemoth social game companies with user-bases the size of small countries reign supreme. For everyone else, it’s the big squeeze. Different market realities create the conditions for new strategies – and this holds true for the role of brands in any given content mix. Once upon a time, early on in my tenure as a video game creator and entrepreneur, I learned that success doesn’t begin and end with IP ownership. There are two additional factors that come into play: control over your intellectual property and access to distribution. These three areas combined – ownership, control and distribution – comprise the ecosystem for determining the success of your title (in addition to whether you have a great product from the start or not). So, for example, it is possible to own a piece of IP but not to have control over it. In this case, a content creator may give up control over the right to create sequels or other derivative products based on their games as they see fit. This often comes about when working with a publisher, for example, who may invest money in a company or product – and that investor may place limitations (sometimes for years) on how you may use and control your own IP. Alternately, it is possible to own and control your own IP – but to have limited ability to distribute the game, either because you are unable to get the title in front of enough eyeballs to generate significant revenue — or you have signed a deal which prevents you from distributing the game in a certain channel or category. Sure, IP ownership is important, but what good does it serve you if you can’t control its destiny? How valuable is that IP ownership if you can’t access enough players to make it worth your time and investment? The Social Game Bubble A majority of small- to medium-sized game projects that are being funded these days seem to fall in the realm of “Facebook games.” Unable to resist the fervor, people from every corner of the games and entertainment industry are flocking to Facebook. If I had a dollar for everyone who says they are making the next Farmville, I’d retire to my own Treasure Isle, sipping piña coladasallday. Add to this the fact that most private investors are too bedazzled by Zynga’s purported $5 billion valuation to focus on anything else. Kudos to Zynga for pulling off such remarkable growth. However, it’s created a situation whereby if private investors are still looking at the games space (and many of them are on the sidelines, taking a wait-and-see approach), they are often only interested in funding “the next Zynga” – whatever that really means. Let’s forget about Farmville clones for a moment – there’s also a slew of purported Zynga clones: “Zynga for real men,” the next “Zynga for Asia,” the German company, Plinga (get it?), and, of course, platforms that supposedly allow anyone with a game idea and a dream to also be “the next Zynga.” That’s a lot of Zyngas, wouldn’t you say? Talk about sucking all of the oxygen out of the space – both creatively and in terms of the business side of things. If we aren’t in the midst of another huge bubble, then somebody please pinch me. So, now we have a flooded market, despite the fact the conditions for creating “the next Zynga” have changed dramatically over the past year. As we all know, Facebook, increasingly aware that its business model revolves less around making social game companies rich and more around its advertising solution and Facebook Credits, has made significant changes to its platform – especially around things like passive notification and requests. The impact of all the recent changes to Facebook on social gaming is clearly evidenced by the significant drop in users that most social game companies experienced in May 2010, a decline that coincided with those latest platform changes to Facebook. It’s been reported that Facebook made over $800 million in revenue last year from its self-serve ads – and it seems like this is just the beginning of Facebook’s revenue-making potential on this front. Long gone are the days of free advertising to Facebook’s estimated 500 million users – now you can expect to pay anywhere from $.64 — $1+ to reach these same users in North America alone. New Rules of Engagement Whatever you may think of the merits of this recent onslaught of Facebook platform changes, one thing is for sure: the rules of deploying social games successfully are different. So, as a result, you will no longer hear CEOs from top social game companies say that good game design “doesn’t matter.” Faced with fewer ways to incorporate virals into a title, the latest trend in social gaming is pointing to a renewed focus on engagement. It’s all about engagement, man, once again. Everything old is new again. How novel. So, how can a small to medium-sized social game company without the fat audience pipeline that a Zynga, Playfish or a Crowdstar has even begin to compete on Facebook? Well, they could position themselves to be acquired by one of the Big Three, which many have done already. Or, they can saddle up with a big brand and take advantage of the marketing muscle that big brands can deliver. Similar to the strategy behind FIFA Superstars by EA Playfish, consider the recent success of iWin’s Family Feud game – often cited as an example of how the right brand can deliver in terms of audience on the Facebook platform. The Family Feud app beat the perceived odds that big brands don’t work on Facebook. iWin, in partnership with FremantleMedia Enterprises and Backstage Technologies, didn’t just slap on the Family Feud branding and call it a day. Instead, they considered what of the Family Feud experience best leveraged the inherently social elements of the game. Small to medium-sized social game developers and publishers would do well to take a page out of Playfish’s or iWin’s book. By integrating a mix of original IP with big brands, social game developers may hope to be competitive in this increasingly crowded space. Of course, there will always be the push and drive toward original IP. Just consider LOLapp’s recent announcement that it is moving completely away from working with big-name brands, made not so coincidentally at the same time it has agreed to use Facebook Credits exclusively. So, the focus on original IP continues to be a tried and true approach — if you have the mojo to make (or at least be able to identify and acquire) the winning IP and enough distribution muscle to back it up. If the business opportunity makes sense, I would say that overall success or failure in going with a full or partial branded game strategy may be a bit more nuanced than whether it’s a good vs. bad idea. For example:
- Have you chosen the right brand for the platform and its audience?
- Do you have the right partner? How much will they be involved? Is that a good or a bad thing?
- Is the overall implementation sound? Are you delivering on a blow-out entertainment experience or would this title not perform well, whether it had a brand attached to it or not?
Branded games do get a bad rap, often much deserved. However, it is possible for companies to successfully execute on having brands in the mix in a way that makes it worth their time, both in terms facilitating growth and delivering on any potential upside. In the End… Once upon a time, early on in my tenure as a video game creator and entrepreneur, I learned the value of IP ownership. Now, I’m all about the mix – a good content mix. Especially if you want to compete in the Facebook space, it makes more sense than ever to balance your IP offerings with some original IP and some IP that is based on well-established brands. Of course, I shall have this opinion until I change my mind once again. Politicians aren’t the only ones who are permitted to flip-flop. So stay tuned. Margaret Wallace is an American entrepreneur, video game and media professional. She is the CEO of Playmatics (www.playmatics.com), a company dedicated to bringing rich games and applications on the Internet, in social media networks, and on a variety of connected gaming platforms. She currently works with A&E Television Networks Game Division, which includes Lifetime Television, The History Channel, A&E, and The Biography Channel. Prior to forming Playmatics, Margaret was CEO of Rebel Monkey, a venture-backed company focused on creating a free-to-play game world and community platform utilizing virtual goods and microtransactions. Before Rebel Monkey, she was a founding member and CEO of Skunk Studios in San Francisco, CA, one of the first-ever casual game companies and portals. Margaret has also worked with numerous brands, licensed products, gaming portals and original IP.