Notes, video and commentary on the Social Gaming Summit June 16, 2008

The Social Gaming Summit was quite a success on Friday. Over 400 attendees seemed to enjoy the sessions based on the high proportion of people in sessions (vs in the lobby) and the fact that even the last session, that ended at 6pm on Friday evening, was very well attended.

The attendee list was a good mix of game developers and publishers, with people coming from both the gaming side and the social media side. Most of the attendees with gaming backgrounds came from casual gaming, web based gaming or MMOG backgrounds. With the notable exception of EA, there were few representatives from the giants of the console space.

Although each of the topics covered different topics, it was clear that monetization was top-of-mind for all panelists as the discussion on most panels eventually turned to this issue.

I (Jeremy Liew) moderated the first session, on What Makes Games Fun, featuring game design thought leaders Amy Jo Kim, Nicole Lazarro and Ian Bogost, plus John Welch of Playfirst, the company behind one of the most popular casual game ever, Diner Dash.

The discussion was wide ranging and covered Nicole’s framework for generating emotion in games and the four types of fun and Amy Jo Kim’s five game mechanics.

There was excellent discussion about how fun, addictiveness and business models can either collide or work together, with in depth discussion of two games in particular, Pack Rat and Parking Wars.

Pack Rat was lauded as an example of a game that did a masterful job of creating addictiveness through game mechanics, and a game that had a natural digital goods/service business model baked into it. But some panelists questioned whether the “grind” without real “payoffs” at different levels could burn players out. In contrast, Diner Dash had real changes in game dynamic and strategy as players level up (e.g. when Flo gets the coffee maker at level 4, it changes the winning strategy) that made leveling up more meangingful and rewarding.

Parking Wars was pointed to as a highly social game with a genre matching to the mass market that let players “play slight variations of themselves” where they could explore slightly nefarious behavior in a safe environment. But “winning” in Parking Wars forced activity to the edges of the social network, instead of to the core, so the “points” game mechanic ended up working against the “fun”.

UPDATE: Virtual worlds has an excellent writeup of the What Makes Games Fun panel.

The second session was focused on Casual MMOs and Immersive Worlds, with Joey Seiler from Virtual World News moderating representatives NeoPets, Nexon, K2 Networks and Gaia.

One of the key questions was how to get free to play users to open their wallet. Gamasutra covered this panel in detail and noted:

Added Kim (Nexon): “A lot of people think they can make money off of casual games where people play a couple of hours a week. I don’t believe that. When people get engaged with the social experience then they’ll buy items. You need to understand the psychology.”

Reppen (Neopets) continued: “For us, it’s all about a sense of ownership that our audience has. There’s a real sense that it’s their game… The identity component to virtual worlds is so important, but there’s so many other things going on in the meta games around earning points, acquiring wealth, shopping and customizing and creating your own experiences… It’s part of a mix.”

In other words, even for casual MMOGs, you monetize the hardcore players who tie their identity into the game. Erik Bethke (GoPetsLive) said the same thing at this years GDC previously in explaining why he applies game dynamics to make virtual worlds more addictive.

UPDATE: Massively writes up the panel in Q&A style.

After lunch Andrew Chung from Lightspeed moderated a panel on Asynchronous Games on Social Networks with the CEOs of the companies behind many of the top games on Facebook, including Friends for Sale, Zombies, Vampires, Warbook, JetMan and (fluff)Friends.

Inside Social games took live notes from the panel. One interesting counterpoint in response to the question, “How do you move people down the spectrum to make them more engaged and hard core?”:

Blake (Zombies, Vampires etc)- There is always going to be some subset of your userbase that’s never going to play more than their 30 minute lunch break, because that’s all the time they have. Don’t inundate users with too much experience at the beginning, gamers hate to read, I’ve never read a game manual in my life.

Siqi (Friends For Sale)- I think there’s a lot to learn from traditional MMO design, things like levels. If you get to the next level, you get this new shiny thing. It makes the game more complicated, but it works. Our hardest core users use more synchronous features.

Shervin (Warbook, Jetman, etc) – The first generation of social games were incredibly simplistic, and the platform was so viral, that it was a lot easier for apps to grow. But it behooves all of us to invest in content. I’m staying up late at night building social games 2.0, games with richer content, deeper stories, much better user experiences. It’s going to become harder for independent developers. I can’t talk about the games we’re working on, but you can look at Playfish. Their engagement levels are high and they’re growing faster than those that have come before.

In other words, games need to be easy to learn, but hard to master.

Next up was Dean Takahashi of VentureBeat moderating a panel on User Generated Games in Social Networks and Virtual Worlds. The speakers were from IMVU, Dogster, Three Rings (Puzzle Pirates, Whirled and Bang Howdy) and Habbo.

Virtual Worlds News has coverage of the panel and noted that:

In IMVU, said Rosenzweig, creators “do what they do because it’s cool, but they like making credits” by selling the items in world. That can then be cashed out through IMVU, which leads to 90% of its revenue, taking a cut while transfering IMVU credits to real world dollars. That user attitude is true of Dogster and Catster as well–users don’t get a cut of the money generated by creating games around their items and boosting activity. They just enjoy creating and sharing.

In other words, social game players generate content for love, not for money. But if there is money there to be had, they don’t mind taking some of that too! Last month Chris Alden noted the same experience in the blog economy.

UPDATE: Worlds in Motion also has a writeup of this panel

After a short break for cookies, the attendees reconvened to hear Brandon Sheffield of Gamasutra moderate a panel about Building Communities and Social Interaction In and Around Games, featuring the leaders of Kongregate, Zynga and Addicting Games, along with noted social architect and game designer Amy Jo Kim.

The discussion centered on the desire that many users had to communicate with each other, and how games often served as an easy way to break the ice and provide topics that made it easy to start a conversation. I haven’t found any coverage of this panel online unfortunately.

The final session of the day was focused on Monetization and Business Models for Social Games. My partner Ravi Mhatre moderated the panelists, including the leaders of Mochi Media, Sparkplay Media, Stardoll and Acclaim. This was a fantastic panel. Virtual Worlds News has great coverage.

Although most of the discussion was focused on the four models of advertising, subscription, digital goods and retail, David Perry noted that there are by his count 29 business models for games.

On the mix between advertising and virtual goods, the panel mostly agreed that virtual goods was the primary revenue stream but that advertising was an important secondary stream:

“Microtransactions and advertising go perfectly togetehr,” said Miksche. “Microtransactions drive our business, but we will never have 100% of our users wanting to pay for that. Advertising is a good way to monetize that remaining X percent.”

There was some good discussion about the tension between game balance and letting players buy powerful items in the games. Several panelists noted that self expression was a key driver of virtual goods sales:

As for who’s paying, Perry (Acclaim) expected most microtransactions to come from hardcore MMORPG playerskitting out the avatars with fancy armor and such. Instead, it comes from Dance. The game is a simple dancing activity, but because users spend so much time looking at their avatars, the appearance and identity becomes even more important.

That works well for Stardoll, a fashion-themed site, especially with trends that match the real world…

“We’re One-Click Dressing,” said Miksche (Stardolls). “You come to the site and instantly start dressing. For our users, young girls, that’s very important–instant gratification.”

For those who couldn’t attend, UStream.tv hosts video from the social gaming summit.

Andrew Chen’s blog also has his takeaways from the social gaming summit.

I’ve pulled together all the coverage I could find, but if there were additional posts, please let me know in comments.