Social Media and Casual Video Gaming

After my last blog entry, the question came up whether it is “that easy” to evolve from purely a casual game download company to a social gaming company.  The answer is NO and I am sorry if I implied it is easy.  Casual game download companies have many competitive advantages when moving into social media space but it won’t be easy and success is not guaranteed. 

First, the mindset must change.  We are no longer creating a discrete product but really providing an on-going service.  It’s not about developing a great game, testing it, testing it some more and shipping it to your on-line and retail distribution partners.  Although we are still creating a game, it is (hopefully) never finished.  The product that initially hits the market must constantly evolve, both to keep the player engaged over weeks, months and years and also to allow you to monetize the end user, as you no longer making one discrete sale and then done with it.  Development resources must stay focused on the video game.  Your team can’t just pack up on move on to the next project.  The shift from creating a product to providing a service has huge implications on your product pipeline and resource needs.

Second, the training wheels are off with social media.  You won’t be able to fall back on portals or distributors to handle the transactions, customer and tech support, hosting, localization, marketing and general hand holding.  It’s up to you to create a robust solution around your games that keeps your customers coming back and continually generates revenue from them.  The upside is you will now have direct interaction with your customers.   You will know what they like, what they hate, and who they are.  You will be able to cross sell them other games and build up a relationship that right now you are ceding to your distribution partners.  Oh yeah, and you will keep a much larger share of the revenue.  Rather then ending up with 25-40 percent of the gross revenue from sales of your game, you will get between 80-95+ percent of the gross revenue (which you must subtract your marketing and server expenses), which on a profitable game can be a big difference.

Third, marketing.  Although already touched upon in the previous point, you no longer will have a partner that can generate interest in your video game.  Some developers in the social media space are already spending $1 million plus per title on marketing.  In the casual download space, you can get buy spending virtually nothing and relying on the portals marketing to attract interest in your games.  Now you probably don’t have to spend $1 million per game per month (we are not planning on it).  There are a lot of creative and innovative ways to generate interest and build a fan base (after all, the beauty of social media is its viral marketing) without taking the brute force approach of just throwing ad dollars around.  Remember though…it’s never free and will take a lot of time.

I could probably list ten other points, but I have always considered three a lucky number so I want to throw out these key points as issues any casual game company should consider before trying the social media space.

Lloyd Melnick,

Merscom Chief Customer Officer