The top 5 things you need to “unlearn” to make great online games

One of the big ideas that is hard for game developers coming from the “classical” world of game design and marketing is to understand the huge difference in medium that online game publishing represents over traditional boxed game development.  There are many talented folks from the traditional game world moving towards online and mobile game development encumbered with a lot of experience and “knowledge” from the traditional game world that will serve them poorly online.  There are also many talented online and mobile game developers who still have a lot to learn about the medium that they are still pioneering.  In this article I will attempt to fundamentally alter your point of view about how you THINK about game design and marketing in an online world.

To that end, here is my top 5 list of things you need to “Unlearn” to succeed in online gaming

1)      Online games are not PRIMARILY valued for their production values or “content”

2)      VIRALITY is your god, if you don’t understand its relationship to game design, your games are doomed to fail

3)      Online games must be their own best advertisements, there is no separation between marketing and game design

4)      Online games must be their own best sales force, there is no separation between business model and game design

5)       Social engagement and emergent content are the primary “Features” that consistently define modern hit games

Let’s examine each of these points briefly;

Online games are not PRIMARILY valued for their production values or “content”

By “production values” I mean lots of high quality media.  The traditional game industry relied on selling “boxes” of content that most consumers purchased sight-un-seen after, maybe, reading some magazine reviews about the game.  Each box of game content contained a body of relatively linear, highly authored content that was designed to be consumed over 50-80 hours of play, at which point it was hoped that the consumer would buy another box of game content.  The value of the game was defined by the quality and volume of game assets contained in each box.  Unlike in the retail world, “high production values”  are not the primary value generator for online and mobile content, in fact they are often responsible for a games failure.

1)       Making a game larger increases its distribution friction and hampers virality which, as I will explain shortly, is a MAJOR mistake in an  online world

2)      It is a huge mistake to make online games that have an END.  An online games #1 job is NOT to make money, it is to accumulate and engage audience.  When a game ends, its audience is lost.  Generating lots of revenue is a symptom of a successful online game, not the end result.

In the online world, media assets should be considered a highly conserved resource that should be applied with finesse, polish and extremely high re-use.  There is a tendency of traditional game industry veterans moving into online/mobile game development to believe that their experience with high production value narrative game design will give them a competitive advantage, when the opposite is true.  I have met many disillusioned game developers who made great looking narrative style games and been mystified when they failed online.   It’s not that consumers don’t want great graphics, sound and animation, it’s just that their patience and attention span is usually too short to appreciate them because they’ll move on to something else if trying a new online game requires any time to load, install or otherwise learn.  Consumers won’t give a fat game the opportunity to market itself to them even if it’s great, which is why they can fail online.

VIRALITY is your god, if you don’t understand its relationship to game design; your games are doomed to fail

This is such a HUGELY important point, yet I’m constantly shocked to meet seasoned online game developers who haven’t fully grasped this yet.  There is only ONE efficient way for an online game to succeed and that is to generate virality.  Contrary to popular misconception, it is no longer good enough to just make a game SO GREAT that people just can’t help but talk about it.  Not only is it critical that an online game be so great that people want to talk about it, it is also ESSENTIAL to any modern games success that the game is very effective at enabling and incentivizing people to spread the game through their consumption of it.

I’m going to try to make this next point as clearly and simply as I can;

The online market for audience is HIGHLY EFFICIENT; you cannot spend marketing dollars at a profit to buy traffic for a game that does not amplify its own traffic.  You should not spend a single dollar buying traffic for a game that does not exhibit positive virality FIRST.  You can’t generate profits by buying traffic for a game with poor virality.  Every marketing dollar you spend will return pennies on the dollar spent.  If your game isn’t organically viral first, your marketing budget for it should be ZERO.

The definition of virality that you should work with is that each user who plays the game should, on average, recruit more than one other player to join the game during their active lifetime.  To be clear this means that virality is a function of both the players tendancy to invite other players into the game AND the games ability to retain players over time.  A game can’t compound audience exponentially if it doesn’t keep the older players playing while they are bringing new players on board.

The crucial role of virality in online gaming is one of the fundamental reasons that online games cannot be so big or media rich that they take time or effort to install.  Any design decision that places drag on virality, guarantees the games failure because it will not accumulate traffic on its own.  An online or mobile games FIRST job is to accumulate audience.

Online games must be their own best advertisements, there is no separation between marketing and game design

If you accept (which I strongly recommend that you do) that it’s not practical to buy traffic for a non-viral game at a profit, then clearly there are very few effective ways to market an online game.  The irony of this statement is that an online game…is…online… and they are just media like any ad.  In other words, modern games ARE ads for themselves.  The places you distribute them are effectively ad networks targeting gamers.  The 30% revshare that Facebook and Apple collect for your commerce on their networks is effectively a CPM ad buy that is priced in direct proportion to the value of your games own popularity (virality) to their audiences.  If you want to make less money per user by buying advertising from them on top of their rev-share, they’re happy to take that revenue as well, but remember that each dollar you give them from your own pocket would probably have been better spent making your game a better “ad” for itself in the first place.

To support my earlier points on the subject of virality, would you ever install a browser plugin or download an application online or PAY money to view an ad?  “No?”  Then what does that make and online or mobile game that does this?  A bad ad?  Your game had better be very efficient at selling people on trying it and getting them addicted BEFORE asking them to do any work or pay any money for it… or you’re in the business of wasting money making ineffective online ads.

Online games must be their own best sales force, there is no separation between business development and game design

Second only to being great ads for themselves, online games are also their own markets.  It’s their job to attract, addict, and monetize traffic for themselves.  In the modern online world it is not sufficient to make a great game and expect people to pay money for it without them getting to try it first.  Second it is not sufficient to simply charge a reasonable price for your product.  Your product has no “reasonable price”, it’s a time wasting anti-productivity service!  If you don’t try to maximize the value of your content per player then all of your other efforts have been wasted.  Now this is where it gets REALLY tricky because if you don’t religiously understand and accept the earlier points about virality and self-marketing it’s impossible to correctly price your game because you don’t know how to price the value of your own games ability to market itself!

Think about it like this;

Pretend that the cost of supporting each of your games players is negligible.  Assume for the sake of discussion that your game has ZERO virality and that it costs you an average of $2 per player to buy traffic for your game.  Assume that you purchased 100 players this way.  Further assume that 5% of your players will become payers and that their average LTV is $20.   Since $20*5% = $1/user on average, you’ll be losing a dollar in revenue for every click you purchase.  Now if you offered each of your free trial players $10 worth of paid game currency to bring one friend into the game… how much money would you lose giving away that much currency?

Clearly the LTV of your paid players might drop to $10 each because they were getting half their value free… (Not really but I’ll get back to that subject)  So you would lose half your revenue or 50 bucks right?  But your game now has virality of 1, so your 100 players brought you 100 more, 5% of whom paid you $10 bucks each… so actually you lost nothing?  But those 100 players also brought another 100 new players, which also each pay $50 bucks… and they bring another 100 players who pay another $50 bucks!  Wow, what would happen if you paid each of your player’s $15 bucks worth of premium game currency to bring 2 new players each!  You would get exponential audience and revenue growth twice as fast!

This kind of thinking is highly counterintuitive; however it is exactly how you should think about online game design.  Virality and audience accumulation is more important to get right than monetization because monetization is a very pleasant and exponential side effect of successful virality!  If you achieve positive virality what will happen when you buy a click at ANY price?  You will get an exponential return on that click because of the audience chain reaction that purchased user will generate for you.  What price can you afford to pay for a click for a game that does not have this property?  Remember that the price YOU pay for clicks is set by the games that ARE viral which can afford to pay exponentially high prices for them.

So what have we learned?  Virality, self-advertising and self-monetization are all intrinsic aspects of online (and mobile) game design.  Their relationship to one another is intimately entangled and must be delicately balanced in the game design itself.  If you accept this mentality (which you should) then the implications to game design are profound.

Social engagement and emergent content are the primary “Features” that consistently define modern hit games

These are the properties that ensure that two apparently unrelated games like Mindcraft and Zynga Poker are perennial hits.  These aren’t games as we knew them; these are “structured” playgrounds in which the audiences are free to entertain themselves and each other indefinitely.  Their content re-use and the range of play dynamics they enable are seemingly boundless.  How big would your art department have to be to produce enough high production value narrative content to keep audiences this size engaged as long as these games do?  Not only is it impractical… it’s actually impossible to compete with this kind of game design.  Emergent games in which the game produces endless worlds and physics and the players “author” the game themselves have nearly limitless virality and re-engagement value.

In this respect the term “social gaming” can be very confusing and misleading.  Most people play these games alone with relative online strangers.  They are not being “social”; the other players are providing a bottomless source of emergent content that no human game production team could ever manually author.  What “social” really means is a class of game design that found a way to make a successful play mechanic out of getting the games players to do the games marketing for it.  Brilliant!

This is a relatively new and un-explored space in game design that relatively few game designers have shown a great talent for and yet it is an extremely large opportunity.  Will Wright, famed creator of The SIM’s, is of course legendary for his relatively consistent success with these kinds of games.  As he and Zynga have demonstrated, they don’t have to be massive World of Warcraft scale MMOG’s to work.   In fact, in a world where these games are distributed online, it is vastly more important that these games be elegantly and efficiently designed with the greatest emphasis placed on how efficiently they promote themselves virally and retain audience through extremely high replay value and efficient re-use of media.

I realize that there are successful people in the online game world who might read this article and imagine that they are examples of exceptions to the points I’ve made, but they are most likely, mistaken.  I’ve used very simplified examples to illustrate these ideas but they apply universally, often in much more disguised forms.  Virality or word-of-mouth, as it used to be called, in the traditional game industry was always been a hugely important but poorly understood factor in the success or failure of traditional games.  In the classic retail game world, measuring, or accounting for the influence of virality was nearly impossible and the ability to influence it systematically was also impossible because distribution friction was the same for all console games.  As a consequence it was simply dismissed as an important way to think about game design.

id Software, one of the first hit “Social Game Companies”

DOOM was a bloated 3MB’s to download via a 5600 baud modem

*Old school gamers may recall that id Software’s first hit games were distributed for free on BBS bulletin boards.  Each game was designed to exactly fit on the floppy disks of that era.  Id’s President at the time, Jay Wilbur, told me that they had 500,000 copies of the shareware version of Castle Wolfenstein downloaded and sold 75,000 which made them MORE money than the retail version of Castle Wolfenstein which SOLD 500,000 copies.  Of course Apogee Interactive, the retail publisher of Spear of Destiny (Wolfenstein), had to do very little marketing to promote the retail version of Wolfenstein… everybody already knew about the game from the now famous shareware version.

An appropriate analogy for online games vs retail games is the difference between modern movies and modern television show marketing.  A movie is a fixed unit of entertainment content that people pay a premium to consume on the basis of little more than a 30 second preview and some reviewers comments.  Online games are TV shows, the show itself is the best ad for itself and unlike a movie the shows goal is not to get your money upfront and end as soon as possible, a TV shows job is to get your attention and keep it for as many years as possible through the constant re-use of the same characters and plot elements.   TV shows monetize themselves through a complex blend of advertising and paid business models designed to maximize the total potential revenue from the show as a combination of advertising and commerce dollars.

Somebody from the movie industry trying to learn to make TV shows would make a lot of mistakes learning the vast differences in business models despite the fact that both movies and TV shows are based on the same kind of media.   Somebody from the movie industry might also mistakenly think that they had little to learn from television that could be usefully applied to the movie business… until you pointed out that the future revenue from any movie can easily be predicted from its opening day box office revenues which are ALWAYS an exponential function of the word-of-mouth virality that results from the first impressions of the first audience that views it.  The movie maker is doomed to a never ending treadmill of hits and misses because the viral value of a hit movie which is vital to its profitability is always squandered in a matter of weeks as soon as the highly authored content of the movie has been consumed.  Hence movie studios and console game companies all strive for the Holy Grail “franchise” title that they can constantly recycle in a primitive attempt to capture some of the latent value of their contents social virality.

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