Reducing Risk in the Games Business

“I’d spend 100 times more on Facebook ads,” was advice one panelist offered when asked what he would do differently next time he launched a game on Facebook. That advice, among others, was discussed last night at the New England Games SIG’s panel Reducing Risk in the Games Business at the Microsoft NERD Center.

The event kicked off underscoring how video game related consumer spending is estimated to reach $112 billion by 2015, and centered on how to build a successful gaming business within this environment by reducing and managing risk as much as possible. Panelists included Scott Triola, Founder & Principal of 5X5 Advisors and former COO of Blue Fang Games; Tarrnie Williams, President of Roadhouse Interactive; Toby Ragaini, Executive Producer of Zynga Boston; and Dave McCool, President & CEO of Muzzy Lane Software. Overall, they discussed three main topics to help reduce risk in the games business:

  1. Market insight and game design
  2. Having a marketing budget
  3. Having funding and a great team

Market Insight & Game Design

It goes unsaid that a well designed, fun game with top-notch game mechanics is critical to reducing risk and ensuring success. The panelists relayed how developers need to truly understand their market in order to ensure this — not just who they are, but their entire experience in finding and playing the game. In this sense, the panelists suggested focusing specifically on the player’s first session. Zynga’s Toby Ragaini shared:

“If you’re in charge of a product and don’t understand the channel your potential customer is finding out about your game, you’re at a disadvantage. At this point, the whole idea about marketing channels and user interaction is one messy spectrum. Yes, think about the game play experience, but extend your thinking beyond that to where they’re clicking on a banner ad and their experience from there.”

An audience member asked what moment was most critical in onboarding your market, and Roadhouse Interactive’s Tarrnie Williams weighed in with sound advice:

“The moment you tell someone about it — it’s then. It’s not very long. It’s understanding the process of challenge and rewards, and it’s in unwrapping that package where the dopamine drop comes in and you either want to keep playing or not … Being lost or confused is not fun, so unpacking fun and figuring out how to get people to come back is about figuring out the shortest way in your design where you can create something meaningful to occur that keeps people coming back.”

The reiterated on the topic, sharing how switching costs now for games are so low that this first session is more important than ever. Whatever the first touchpoint is, make certain it’s compelling by testing the interaction over and over again.

Marketing

Acquiring a critical mass of customers — and quickly — was cited by all panelists as crucial to reducing risk. The panelists all underscored that getting in front of people as much as possible is incredibly important at launch, because the worst possible outcome is building a sleak game that no one ends up playing.

An audience member asked what the typical budget should be to achieve scale for a new game. The answer was, as you’d guess, it depends. Scott Triola honed in on his experience building games on Facebook in answering the question:

“It’s all about getting people aware, getting them to install the game, getting them through the tutorial, and eventually getting them to pay money … The great thing about Facebook is you can spend $50 [on ads] and still get real-time feedback. If you spend X and get Y users, you can pretty quickly figure out how much it’s going to cost you to drive X more users.”

His comment shifted the discussion to data’s role in marketing, in which panelists noted how real-time data has changed the gaming business forever. Zynga’s newly minted Executive Producer here in Boston weighed in on Facebook specifically, sharing:

“If you’re not analytical and you’ve launched a Facebook game, you’re already at a disadvantage. … Now we have real-time analytics where you launch a feature at 3pm and by 4pm you know whether it was successful or not. It’s really about the cadence of that feedback and how frequently you can get it.”

On specific metrics to focus on in marketing, the panelists discussed the importance of understanding who is driving revenue — including who they’re engaging with and where they’re coming from — so you can successfully retarget them.

Funding & Team

On the topic of funding, the panelists noted the challenges that come along with raising capital in the games business. They offered to self-funded entrepreneurs in the room that just because you have meetings with potential investors that go well, don’t expect the check to be cut immediately — it could take 3, 6, 12 months or not happen at all. They offered that often times the investment comes from an investor’s belief in a passionate team, which often spawns from a track record of success in bringing games to market.

This transitioned into a discussion of the importance of team in reducing risk in the games business. The panelists all echoed and agreed with Tarrnie Williams’ opening line on the subject: “Don’t hire bozos.”

Thanks to the MIT Enterprise Forum and Microsoft NERD for hosting a great event, to sponsors 360 PR, Vivox, Turbine, and Morse Barnes-Brown Pendleton, and of course to the panelists for sharing their advice and experiences.

Posted on November 2, 2011, in Insights & Resources and tagged , , , , . Bookmark the permalink. 1 Comment.

  1. For the concern of business, it should be a helpful direction and analysis. Mainly newly starer are finding such notes to drive themselves into the right direction from very first stage. It’s tough to implement a thought or idea effectively.
    And there are lots of business grounds now a days. For that, these kind of discussion is very much appreciative.

    Regards,
    Alen B.
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