The Design and Opportunities of Skill-Based Games

Davin, VP of Social Games for the Game Show Network, talks about the opportunities of skill-based games

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http://www.indiegamepod.com/podcasts/cc-gsn.mp3

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Show Notes:
Interviewer: I’m here at Casual Connect, and with me today is a special guest. How about you introduce yourself?

Davin: Hi, I’m Davin Miyoshi, the VP for Social Games for GSN, the Game Show Network.

Interviewer: Thanks for taking time with us today. So, GSN, what’s that about? You guys gave a talk at the conference which was really pretty cool. It was about skill-based gaming. Can you talk more to that, and what that exactly is defined as?

Davin: Yeah. So, we have a division, World Winner, and GSN.com where we’ve got a collection of skill-based games, games provided by partners. So, partners like PopCap, FreshGames, MumboJumbo and a number of other partners that we work with that have branded games.

So, we have Bejeweled, for example. It’s a game that we have skillified, I guess is what you’d call it. Basically, we’ve turned this game into a skill-based game. So, we work to remove all the chance-based components of the game. We make sure that the players have the same board when they compete against each other.

The way the tournament works basically is that you have an entry fee where you buy in. So, you actually do pay cash. You contribute, for example, if you have a 3-person tournament coming in, you’d each be paying a dollar to enter. Typically, the first that wins basically will take away the lion’s share of the pot.

We take a rake or management fee out of that. We then share that management fee with our partners, with the content partners. And then, we keep a portion of that.

Interviewer: How long is the duration? Do these games last like five minute sessions, or are these all day sessions?

Davin: Most of the games are pretty short game play, so we work for games that are kind of in the one, two, three minute type game play, the shorter the better. The greater differentiation that you can get in the actual skills, the broader range you can get in the scores is actually a key driver and a key thing which makes the game successful.

And then, tournaments close pretty quickly. So, there’s that core piece that we actually look for and what we try to achieve is high velocity is what it’s called.

Interviewer: When you say high velocity, that means, maybe, a thousand people can come in, playing the same board within an hour’s time, and then after that, it might be closed.

Davin: Yeah, that’s exactly right. So, people can come in, play a tournament, and they’ll see the results instantly and be able to come back and be able to play in other tournaments.

Interviewer: When you say skillify a game, what other things besides that ensures that everyone gets the same board or the same setup, that you have to make sure that it’s “skillified”?

Davin: You’re going to get a little bit beyond my expertise here, but basically it’s really the fundamental component. It’s just eliminating the chance. And so, if you think about it, the large part of it is making sure that people get the same game board, gets the same deck of cards.

Interviewer: The same bonus thing and no kind of random bonuses.

Davin: Yeah, eliminating all the random elements of exactly when bonuses show up and making sure that everyone gets the same bonuses at the same time.

Interviewer: Now, what’s interesting is you guys brought up a number which was like over $300 lifetime value for a customer. Can you talk about what that exactly means? That seems even more provocative than what people are talking about in terms of a virtual goods model.

Davin: Yeah, it actually is. A lot of this comes from it’s the lifetime value of a paid user. Really, what that’s being driven by is that people, paid users, are really paying quite a bit of money because that’s net revenue. So, basically, we’re looking at after folks are paid out, it’s purely the management fee and the revenue that’s generated by the user, not the management fee.

Interviewer: And so, aside from Bejeweled, what other types of games… What are skillified games? Can these literally be normal games? Can flash games be skillified, like what’s…

Davin: It’s a pretty broad range of games. There’s card games of solitaire and different derivatives of solitaire. There’s the word games, other puzzle-type games, strategy games. It spans the breadth of casual games.

Interviewer: So, it can be any kind of casual game or pretty much as long as it’s…

Davin: And so, not any kind. I think the key, the challenge is creating a game that when you eliminate the chance that it’s still fun to play and something where you can reach a broad range of differentiation scores.

Interviewer: What about issues like cheating and stuff like that because it seems, since it’s money-based, there could be issues like that? How do you…

Davin: That’s a core piece of what we bring to the table. So, there’s a tremendous amount of fraud protection and cheating protection. So, we built the system to really identify people that are cheating and really lock down and keep them from doing that because a core piece of what we do is making sure that the game play is fair. The second that the players feel the game play is not fair, it really breaks down.

Interviewer: Do you actively look for partners, or how do you find partners that can put games on your site?

Davin: Yeah. it’s oftentimes a goal. Either we identify someone or someone approaches us with games that we think are interesting.

Interviewer: Now, you specifically are working on the Facebook platform. Can you talk about what GSN is doing there and some of the benefits of that?

Davin: Yes. We have a games application on Facebook for that. We have four and a half million monthly active users. About 750,000 daily active users, and there we’re taking a virtual currency-based tournament model as opposed to the cash-based model that you have on World Winner and GSN.com.

On Facebook we currently have a virtual currency-based model. We’re currently working with indie developers, working with larger developers to license games or look at other potential revenue models around games and primarily casual games targeted towards men and women, but primarily, heavily weighted towards women, a very similar demographic to what you see on the Facebook platform.

We’ve got both U.S. and world wide audience.

Interviewer: You know, that’s a great question. In these tournament-based games, is it mainly women that are picking them up or men?

Davin: It’s 65 percent, 60 percent women, 40 percent men. So, yeah, it’s heavily skewed towards women. And also, in terms of the paying users, it’s certainly 30+ women. So, it’s very similar to what you see on the Facebook platform.

Interviewer: And with the virtual currency model, that still allows for the real money order. They can’t cash out the virtual currency, then? Is that the difference?

Davin: Yes. That’s exactly right. So, you can buy virtual currency but you can’t cash it out.

Interviewer: OK. Cool. Where do you see the skill-based gaming going in the future from your perspective?

Davin: Well, so coming to the social networks. I think it’s coming to social gaming. I think it’s an opportunity for casual gamers to really tackle the revenue stream beyond the simple power ups and purchasing of new content that, I think, is typically available to casual game developers today.

Interviewer: And what about – where do you feel the Facebook platform is going? I mean, there’s been talk about viral growth going down, stuff like that. Is that something you’re seeing in your apps, or how are you keeping engagement up?

Davin: So, we are growing. But I would say we’re up amongst the top growing applications. It means that there are no other apps that are growing at the moment, but we’ve been on the platform since its inception, three years. We’ve seen the ups and downs of the platform, and our firm belief has always been that Facebook is really motivated to continue to create a thriving developer community and platform.

For them, it’s always been between trying to protect users as well as providing a sense of developing the platform. You’ve sent the cycles of the ups and downs, and I think the next few months will see some changes by Facebook to kind of increase virality again.

Interviewer: Where can developers who are interested in improving their skill-based gaming or getting the whole experience go to find out more about either your games or play them?

Davin: Yes. You can come to our website which is apps.facebook.com/mesmogames. So, M-E-S-M-O Games or you can also send an email to BD, so Boy, David, at GSN.com.

Interviewer: And can people go to GSN.com and also play some games?

Davin: Oh, absolutely. You can go to GSN.com, play some skill games there and see how the whole system works.

Interviewer: What about World Winner?

Davin: World Winner is a wholly owned subsidiary of GSN, so GSN.com now ties into World Winner.

Interviewer: Thank you very much.