The Business and Design of Free-To-Play Games


Austin GDC: Video Interviews with Dave Grossman and Thomas Bidaux

Austin GDC is over and we're back up in Canada. We flew through Houston on the way back, which wasn't nearly the Atlantis it's made out to be on the news.

Our final video interviews from the show are posted below. Thanks to those that gave us their time. Enjoy!

Dave Grossman

Dave Grossman, Design Director at Telltale Games (makers of the episodic games Sam & Max, Strongbad and Wallace & Gromit), talks about upcoming games from his studio, the challenges of episodic delivery, player input on design and more.

Thomas Bidaux

Thomas Bidaux, VP of Strategy at Avaloop, talks about their debut product, Papermint, the free-to-play business model and what teenage girls want from their virtual goods.


Club Penguin Founder Lane Merrifield – Keynote and Q&A

Here we are at Austin GDC! First order of business was attending the Lane Merrifield Keynote, entitled "At Their Service: Making a Difference By Putting Players First," where I took copious notes. I have 40 mins while our first video interview (Mike Zummo of Acclaim) downloads from our camera, so here are my notes, cleaned up a bit:

Also, here is our photofeed from today, updated when we can.

Lane's Talk

  • Lane's plane landed at 4:30 this morning due to Ike travel complications. He jokes that if he's slow today, it's not because he's Canadian. I take minor offense, being Canadian myself. :)
  • By putting the player first, better customer support is natural follow through. But we also build better games and stronger businesses.
  • Lane is a huge fan of Walt Disney and was with the company long before they acquired Club Penguin. Lane first job was manning a float in the Lion King parade at Disneyland (shows his employee pass from Disneyland, including Flock of Seagulls hair). He rode the float every day after school and also controlled a 300-pound animatronic crocodile.
  • While at Disneyland, Lane observed that trash got picked up fast and drinks got replaced instantly when spilled. All the staff had a great attitude of service and took care of each other behind scenes. The environment was all about taking care of each other and service.
  • The passion for serving at Disney came from Walt Disney himself. He built it for his kids. Without realizing the parallels, Lance and Lane built Club Penguin for their kids to play in. Lane strove every day to find news ways to make it safe and fun for his kids.
  • Lane makes the point that "Serving must be genuine" - providing his dad's "shirt off your back" gauge of someone's service integrity as proof. In a snowy Canadian winter, someone who would give you their shirt is gold.
  • (Big story about how he's called Jason at his local starbucks. Point was likely about Customer Service Reps (CSRs) not taking time to know their customers.)
  • Lane then reads from a note he sent to his development team after Club Penguin initially launched amid the usual dev team chaos and late nights. The letter was a story about when Lane saw parents and teachers shepherding kids across a snowy road. His analogy to the net was that some companies thought crosswalks and stoplights were the solution to keeping kids safe on net, but kids still felt isolated and unsafe and confused. Danger still existed to those trying to cross. Club Penguin believes kids need advocates - holding their hand, walking with them - and Lane hopes that as a company they always go one step further to pick up that hand and cross the street together.
  • "Crush the Joy" - Lance, co-founder of Club Penguin, coined this phrase. Lance is convinced that before anyone joins the team, they need to have their ego turned down a bit. Hence, Crush the Joy. Dev team members need to work together to serve audience and let go of ego that gets in the way. Devs often wind up front and centre of what we build - we end up building for ourselves and not the player.
  • Club Penguin has worked tirelessly to find people who had a passion for serving kids. Without it, they wouldn't be hired.
  • Pixar has a saying: we put people through a gauntlet to get in here, but once they are here, we treat them so well they don't want to leave.
  • Club Penguin was once fired by a staffing firm as CP consistently turned down highly qualified candidates who weren't right for the position. CP has hired a lot of CS people from Starbucks because they know how to talk to people face to face.CP also hires people out of summer camps, boys and girls clubs, teacher's assistants, etc to take care of player base.
  • Most of the CSRs have rarely done more than email and web browsing with PC before coming in - deep tech knowledge is not as important as people skills. CP does not use automated responses... CSR team personally responds to 5-7000 emails a day.
  • Programmers stand over CSRs shoulders to measure things like mouse travel to make minor changes to CSR interface to optimize work flow.
  • Because real people answer player inquiries, players are more likely to relay qualitative info back to CSRs about issues like game difficulty, suggestions for "white fur" found randomly in game, etc.  CP approached this feedback in a revolutionary fashion: "we didn't do what the kids said would be lame and did do what the kids said would be cool" - applause
  • "If it doesn't matter to a kid, it doesn't matter" - this is the mantra CP works toward. Easy to get distracted and focused on ourselves - easy to get caught up making what we think is cool or what our friends think is cool, but need to remember what the kids think is cool. Should always be striving to serve our audience. That will create better games, work environments and a better business as a result.

Q&A Period

How do you differentiate between vocal minority and whole audience when acting on feedback?

  • CP deals with a certain demographic that can barely type and read. Full time staff reads blogs and forums, play testing is done in office, etc.

Do you use any metric systems for pooling user data?

  • CP does not have a lot of systems for that. We rely heavily on people... emails come in by the thousands focused around certain topics, CSRs gather that info and compile top 10 issues and send out to dev team.

Does CP have any plans to do microtransactions?

  • This is a tough thing for CP to do, due to age of audience. Subscriptions are easier for parents to moderate spending. Subscription model makes it easier to focus on parental needs, versus an ad-supported model. For instance, CP just launched a timer that kicks kids off after a parent-determined aount of time.The cool thing is that there are no advertisers to get mad at CP for doing that - parents wanted it, parents got it.

Any other recommendations for fellow kids world devs, besides serving?

  • Know your audience, keep them in the forefront. CP is fortunate we did not take on any VC as we didn't think it was going to go as far as it did. We used our own credit cards to start it up and didn't need to be accountable to anyone but parents and kids. There were no VCs in our ear talking about the latest research and focus groups, etc.

Would you like to open up new avenues for users to give feedback?

  • There is never a bad way to get feedback from customers. CP also had phone support to talk directly with users. They are open to any new method for feedback.

You slated a percentage of profits to go to charity in the beginning. Was that maintained when you were acquired by Disney?

  • Yes it was maintained and continues to this day. CP does not talk about it a lot as we don't want to turn it into a marketing pitch. "Coins for Change" was our first public charity event - it allowed kids to give their coins to one of three charities. Then, CP took $1M and distributed it proportionally according to how kids put their coins between the three charities. Two billion coins were given, which is remarkable due how difficult it is to acquire coins in the game. Disney never questioned keeping the charity program.

How do you give kids what they want when, depending on the age group, kids can be bloodthirsty llittle monsters? How do you distinguish about what they say they want and what they really want?

  • Kids always ask for beds for their igloos, but it leads to inappropriate stuff so CP will never do it.

What are some of the key personalities or traits you look for when hiring?

  • A lot of it comes from gut If the people doing the hiring are not the type of person CP is looking for themselves, it gets a lot harder to hire the right people. Up in Canada, it's a very relaxed environment well suited to producing those sort of people.

Does CP appeal to an older audience?

  • CP actually has a wider demographic than people realize: 6-14 years old. It takes on a geeky cool thing at the older ages, like Napoleon Dynamite. Older kids spend more time on Xbox but will still hop on for snowball fight wtih friends in CP.

What percentage of your budget goes to Customer Service?

  • Two thirds of our staff, 150 ppl, are dedicated to CS. We are opening offices in Brighton, Australia, Brazil, etc.

What kind of predator protection tools do you use?

  • Predators are not much of a problem for CP due to our filtering tech and massive human presence on CSR. We remove several hundred words a day from system. i.e. "lollipop" takes on undertones due to pop song, so we remove it. Then we review it a few months later to see if it can be reintroduced. A lot less gets through than people realize. Reportable incidences are how these issues are measured and to date CP has not had one. Nothing is ever perfect, but in a sea full of unlocked cars, CP is low-jacked and locked up. Plenty of easier targets for predators.

With two thirds of staff being CSRs, are costs a concern? Would you ever outsource?

  • CP worked hard to build a scalable model and work on efficiencies in CS. We support English alone in Australia, UK, North America, so it's really important to have people in each country that know that region's slang, etc. CP is so passionate about CSR system that we have never brought up outsourcing it.

How will your product evolve to accommodate a more mature userbase?

  • CP has a substantially large writing staff working hard to make sure there is relevance across the board, but realistically, CP will never be able to compete with a 17 year old's console gaming habits, etc. So at some point we need to let them go. Now with Disney we can look at developing other products for those older demographics.

I heard Penguin Times is the most widely read newspaper in the world - is that true?

  • An article recently compared it to a lot of leading newspapers and it is substantially large, but CP does not keep a lot of hard metrics on it. CP did track it for a while and it was impressive - especially intimidating to the 2-3 writers who work on it full time.

How did you come up with the backstory you have?

  • Story is everything in entertainment. From day 1 we had a writer who started as a support person. She built a team, but a lot of the ideas come from the kids. Lot of logical - and illogical - ideas. CP introduces characters very slowly - we don't introduce 30 chars at once and call it a day. 90% of our internal conversations revolve around what CP can't do re: story, but ultimately the 10% that makes it in, makes sense to audience.

How often do you get feedback concerning the flash platform?

  • Lance is great at working backwards. CP was originally developed in Flash 6 and most of it would run today in that environment. We've always looked for the highest install base and built for that. One of the biggest issues is ports not being open on routers, so we spent a ton of time making sure it just works for everyone. New issues are constantly coming up - i.e. new browsers coming out - but our audience is quite patient as we work through issues.

What other non-English markets do you plan to launch in?

  • CP has 7 or 8 translations in the works now. None are public yet, but our goal is to roll them out quickly. That is one of the reasons CP joined Disney. In the next 6 months there will be several announcements around that.

At what point did you realize you needed more than out of pocket money to move forward?

  • We started CP with aggressive budget, low salaries. We worked really hard to build a scalable model, so as audience grew, CP could cover costs. There were lots of VCs out there, but CP needed infrastructure help not just money. John Lassiter and the crew at Disney were always consistent with what they said would happen and are still consistent.

How can you handle the support tools and requests from other regions and languages?

  • That is one of the reasons we can't just push a button to launch in other territories. We need to ensure the tools work for those regions. CP brings people from that country to their office for 6 weeks, then sends people from CP to the regional office for 6 weeks.

What was the biggest challenge working with Disney?

  • The largest challenge CP has was the size of Disney. Every Disney division has a 50:1 ratio compared to CP's team, so it was easy to be inundated with emails due to difference in size. Bob Eiger called Lane after acquisition and said "If you ever feel that Disney's size is stifling you, I want to be the first to know"

What level of importance does mobile play have for your audience?

  • We are trying to track demographics of our audience and how fast they are adopting mobile. We have a few things in the works for mobile now, but we want to make sure it is done purposefully and not just to check a box. Need to make sure it's as fun or more fun than PC.

How do you deal with banning players?

  • One thing we do is to purposefully keep CSRs who ban from seeing whether it is a member account or non-member account, to prevent bias from creeping in. We issue 24 hour, 72 hour and permanent bans. We're able to see not just chat logs but also what a user was trying to say - i.e. what didn't make it through filters.


The War on Geekiness and 4 Other Trends from Virtual Worlds Expo 2008

[Editor's Note: Contributing writer Simon Newstead is CEO and Co-Founder of Frenzoo, a startup in the 3D fashion and lifestyle space and the writer of the VR Fashion blog.  He can be contacted at: simon at frenzoo dot com.]

Entranced by the success of IMVU, Club Penguin and Habbo, investors have poured millions into virtual worlds with new services blossoming out of stealth mode every week. But where is the space headed?

At last week’s Virtual Worlds Expo, several hundred insiders huddled to offer their own opinions on the future. Operators new and old alike, technology providers, and a smattering of advertisers and Hollywood players came together, and five interesting trends emerged:

1)  The War on Geekiness

Electric Sheep Company’s Sibley Verbeck summed it up well, coining the phrase “Multi-Global War on Geekiness”.

There was recognition that to hit mainstream, the industry has to leave its geeky roots behind and focus on a simple and fun user experience. Barriers to entry plaguing early entrants - difficult navigation, large downloads and complex user interfaces - have to disappear. The presented alternative to shedding our geekiness was fairly stark:  waiting years until Generation Z “Club Penguin” kids grow older. Not a new idea, but one that is really being taken seriously.

New players are paying attention – one example debuting in the US market at the show was Freggers – a game that made avatar signup and orientation a breeze. And it’s working - already Freggers has picked up a user base of over 500,000 in their home market of Germany, which interestingly includes many users in their 20s and 30s - despite a young, pixel-art style.

2) Say No To Large Client Downloads

“If uses have to download a client, you’re dead. You’re a science project only.”- Sean Ryan, Meez CEO.

One of the most lively panels was with the founders from Meez, Vivaty, Three Rings and Small Worlds and all shared the same opinion: standalone, heavy-client virtual worlds were going to fall away.

Daniel James from Three Rings, makers of popular Puzzle Pirates, believes 90-95% of visitors will not install a separate client. His new MMO, Whirled, is 2D Flash and his previous projects have both been Java.

However the panel disagreed about whether Flash was the only option for the masses, weighing up its lack of support for hardware based 3D.

Vivaty CEO Keith McCurdy argued for a light, single-click install, plugin being viable for masses. Installed in under a minute, he approximated a successful install rate of interested visitors in the 40-50% range (note- with Frenzoo we also see similar rates in our early field testing).

Google has taken the browser 3D plugin approach with its Lively service.  And Avatar chat plugin Weblin recently hit 1 million unique users.

In Korea, a bellwether market for many a trend online, 3D browser plugins have been successfully used for some time, including just recently in MiniLife from Social Network pioneer Cyworld.

3) Virtual Brands Go Terrestrial

With so many entertainment and consumer brands moving into virtual worlds, it’s easy to overlook the opposite trend starting to emerge.

A handful of successful online brands are starting to move onto store shelves through licensing and partnership agreements.

Neopets is the poster child in this space and Habbo, on the back of some early dabbling in the space, hinted at the show of a major offline brand tie-up to be announced soon

Look out for more of these crossovers to come in coming months.

4) Branded Items: Not Free For Long

So far, in many virtual worlds such as Meez, branded items have been free. But at least for some items that will soon change.

WeeWorlds head of marketing, Lauren Bigelow, explained the plans of the 25 Million strong WeeMee community: to date, all branded items had been free, but some items will soon cost money, such as premium branded items like an upcoming Paris Hilton.

Why? Charging money for branded items increases exclusivity - and therefore buzz - driving the marketing campaign's objectives. Obviously a revenue stream is a happy side effect as well.

Used well, it sounds like a win-win. Expect experimentation on branded item pricing to happen in coming months.

5) Taking Virtual Responsibility Seriously

Kids world Dizzywood, which announced at the show it had hit 500,000 users, recently used in-game activities to promote respect and responsibility by partnering with the Arbor Foundation for Earth day to encourage kids to plant virtual trees.

Club Penguin has done a lot with WWF and Habbo also has embraced social responsibility when it comes to their users, with a policy in place now restricting the maximum that can be spent on coins each month.

Do these socially responsible activities really pay off? It’s too early to say but respecting users and building up trust surely can’t hurt.