A BROWSER MANIFESTO – PART 3
Social games are like a Super Bowl party or a trip to Vegas. It’s a party, and most of the people are there for social value and entertainment and are not hardcore about the football game or the gambling. Everyone loves a trip to Vegas! Among the group, however, there’s one hardcore guy who will be up late at the poker tables. He may win or lose $10,000. He’s a wolf among the sheep. This is now happening on a browser near you.
As a colleague told me, wolves go where the sheep are. The sheep are casual gamers that enjoy the fun of playing games for the social connections, but aren’t going to blow a gasket if they aren’t atop the leaderboards. Whales, or wolves in this analogy, want to be king of these worlds. It’s worth $1,000 to be a king. And if the sheep are playing casual games in the browser and on Facebook, then that is where the wolves are going to go to feed and build their kingdom.
The games need to be casual or the sheep can’t play them. But they need to offer depth and potential for mastery, so that the true gamers are challenged to exercise their gaming chops as they enjoy. Doing so allows them to feel superior to the sheep, who don’t mind; they are enjoying the socializing.To paraphrase Sagan, we’re going to have billions and billions of gamers in the browser. The games will be convenient, social and free, to maximize viral spread and trial. Virtual goods will be the best way to monetize games. When you charge a price for a game, you kill trial and viral spread. And when you have a fixed price, you lose additional money for customers that might have paid more, and you lose all the customers that would only have paid a lesser amount. For example, a console game sold in a shop for $60 cannot make more than $60, so it loses the “whale” that would have paid $1,000. It also loses the value shopper that would have paid $20 or $2. Virtual goods allow a game to collect whatever amount of money a customer can afford to spend.
What is best known about Zynga is that they have more than 200 million casual and social players on Facebook. But that enormous number is less important because those are the sheep, playing for free. What matters more is the wolves. Zynga recently divulged that they have about 7 million paying customers. What I believe is that most of their revenue comes from only 1 million of them. And if you can get 1 million players to spend $1,000 per year, you have a $1 billion business. But who is this whale that will pay $1,000 in a free game with virtual goods? He’s a formerly hardcore gamer that has bought console games in the past but has now crossed the divide to the browser because of convenience, and because that is where the sheep are, playing casual social games.
I also like to think of this as the beginning of the migration of the whales. Around the world there are 150 million homes where someone was hardcore enough about games to buy a console. Zynga would appear to have an enormous lead over competitors on Facebook, but when you think about it, they’ve likely only captured about 1% of these console gamers because the migration of the whales has just begun. There is a lot of market growth that remains up for grabs as the migration continues and as the browser moves beyond the PC to tablets, TVs and smartphones where Zynga is not strong. Enough of these core players migrate and we will have that $100 billion social/mobile market that is now forecasted. Many new and small game developers have a wide open shot at this trend.
Well, I think the problem is that I’ve yet to see any Facebook game that actually has depth of gameplay mechanics versus the breadth that seems to be the key in every Facebook game. A lot of the people I’ve talked with within the whole social games industry don’t even seem to grasp the fundamental concepts of breadth versus depth and how to achieve it.
And true, Wolves go where the sheep are, but not unless they can eat the sheep and show everyone the carcass.
I have to agree 100% with this. It’s not an easy nor obvious conclusion to extract, but this is confirmed by our experience as social game developers: The whales are previous hardcore games that are beginning to be lured by the convenience of FB games.
This could be true to an extent, however it is difficult to differentiate a “true” die hard gamer that has crossed over with that of a true wolf, one that identifies themselves as a die hard gamer, however lacks the skills to really truly be number one on the Halo leader boards or can last more than 30 levels in horde mode on Gears of War 3. They have a low threshold for frustration and desire some type of immediate gratification and would do anything to become the top, without really earning that place through their own skill. I’m not so sure that they feel they need to prey on sheep, so much as they have such a desire to feel that the world would validate the if they are on top, that they spend beyond their means to get there as it bypasses the hard work. The entire gameshark, gamegenie, cheat code central market would suggest this to be true and given the size of that market early one, it may very well represent a significant niche within the game market.
A true gamer could go into these arenas as well because their friends are there, however i’m less apt to believe that they would transition to become a whale or “dolphin” yet… but i could be wrong and this is becasue many top gamers, at least from personal observation and experience, may simply just play very casually like their friends as well, but not really engage as enthusiastically. It still satisfies the notion of desiring to be social with their friends, but i’m just unsure if they’ll spend much more. The motivation to dominate over all those who have an extremely high skill level vs dominating over people they know aren’t good, isn’t noble or I guess chivalrous. Its like how kobe bryant would feel beating up on a bunch of high school kids. I think they would just play with their friends, but hold back. So i think the former type whale would be more apt to spend.
However if you think AUC (area under the curve) you do have long time fans of games that consistent stay, they keep the DAU/MAU ratios nice and high, those by far are your “whales in sheep’s clothing”.
However I do agree with the overall premise that the platform by which we are consuming gaming content is shifting, the demand for this content has not changed. Like the westward expansion, the early pioneers really didn’t lead to much change and many had been eaten by bears or killed by the elements or the natives, but once the infrastructure gets laid down and posts are set up, everything will move.
Trip definitely was one of the pioneers, and he has his scars to prove it, but the infrastructure is getting there, so it will be interesting to see what is upcoming.