In the first part of our interview with PopCap Game's Chief Creative Office Jason Kapalka, he shared his thoughts on Google vs Apple, whether big companies can adjust to the new wave of mobile and social games and why FarmVille is a Warcraft-killer.
In this second part, the loquacious co-founder discusses the dangers of hasty acquisitions, Popcap's future in the changing marketplace and the importance of brands in the Facebook age.
Q:You seem oddly relaxed about all the drama going on in the social space – is this not a fight you feel you have to win, or even really take part in?
Jason Kapalka:I don't think we're quite safe exactly. There's always something surprising that can come along. I wish certainly that we'd been a bit more in the social space a bit earlier. We've got a foothold there with Blitz, but we're not Zynga, we're hardly the leader in social games. I feel we least have a beginning, I don't feel like we're on the outside trying to figure out how to get in. I feel PopCap's really diversified over the last ten years, we've never been necessarily the biggest company doing Xbox games or mobile games, but we've always been able to keep our hands in all these different areas, and sort of shift as necessary to whichever platforms are doing well. We're not trying to win the lottery, we just want to stay abreast of the stuff that's happening and bring our games where they can be played. So I'm not that panicked about it because we're relatively well-placed for the future. A lot of the games are the kind of thing that we do. They're small games that work well on things like the iPhone or the iPad or on web browsers. Compared to a company that makes $50 million first-person shooters, we make small kind of things.
Q:And people don't have to agonise about buying them...
Jason Kapalka:Yeah, and our price-points are low. I certainly wouldn't say that we're cocky or arrogant about things going forward, because there's a lot of stuff that could go wrong. In general though it feels like the industry is caught up in the kind of games that we've always been doing. It feels less like we're in a position where we have to argue about why casual games and other games like we do are legitimate forms of entertainment. Anyone can look around now, they look on their iPhone, they look on Facebook or at the Nintendo Wii. It's pretty obvious that casual has kind of won, casual is the new mainstream.
Q:Can that sustain, if the reaction from new and acquired studios is to continue to make lots of FarmVille and Bejewelled clones?
Jason Kapalka:There's going to be a lot of that. The truth is that there's that in every industry. I mean, MMOs, there's no shortage of terrible World of WarCraft clones that didn't really work out, and you'll see the same thing I think here. A handful will survive, a bunch will fail. You're definitely in the stage right now in social games where there's a lot of bandwagon jumping, where everyone sees moneymoneymoney and suddenly all these new companies appear... It happened before in mobile, it happened before in casual – in the past it's tended to signal the beginning of the end.
Not necessarily of the genre, but of the sort of golden era, where everything was a fresh blue ocean and all that stuff. It's getting into the era where it'll be a lot more hard-fought. It'll be tough. People will make money there, but there'll be a lot of competition and then margins will shrink and all that sort of stuff. That's my thought on where we're heading with social stuff. Facebook can't go that much faster, they're only going to tighten up their restrictions. Sooner or later they will raise their rates, do other things like that, margins will just get increasingly tough.
You're already sort of seeing that, a lot of the viral growth of Facebook games is now shut down, they have to do it the old fashioned way, which is by buying ads or by having something that people are actually interested in playing and actually want to want to tell their friends about. From our point of view, we can live with that. That's an okay solution for us. So I'm fairly optimistic about the future – there's enough crazy stuff going on that you never know what's going to happen. I know Google are doing some sort of social network...
Q:I was going to ask about that – how much room do you think there is for another one?
Jason Kapalka:I don't know. I like Google and frankly I kind of hope they succeed. But their track record for social stuff like Buzz and Wave and Lively isn't so great. In terms of social and games, the two things they're trying to do right now, they don't have a genetic background for it. That said, they didn't have one for phones either, and Android seems to be working out pretty good. I certainly wouldn't count them out. I would say that if you're going to take on Facebook right now you've got a pretty uphill battle. But if anyone can do it, might it be Google? Yeah, I think so.
Microsoft are trying their own thing to... [pause] Yeah, Microsoft, yeah - surprisingly, they've been doing some pretty good stuff lately. Some of those things like Bing and Windows Phone 7... It's fashionable to look at Microsoft as being a bit unhip, and not quite getting it. But if you look over the last few years, they innovated pretty dramatically in a couple of key gaming areas. Xbox Live is really the model for how to do effectively a social network. Xbox Live is basically a gaming social network, and no-one's done that better. They haven't figured out how to carry that through effectively onto PC, but that said, might they be able to make it work on phones? Possibly. It could go either way. I could see it working either really well or not. It'll be very interesting.
Q:They could almost start being seen as the plucky underdog, versus the Goliath of Apple.
Jason Kapalka:In some ways they almost are. And frankly if Oracle and Google beat each other up, Microsoft might be the winner. That'll give Windows Phone 7 a lot of breathing room that they probably need.
Q:How has PopCap's stance on new ideas versus sticking to established brands changed in this era where people don't have the time or patience they once did to try new things? Someone came up with a list of dozens of URLs you guys had registered the other day – Pegglebingo.com, bejewelledslots.com and that sort of thing...
Jason Kapalka:Yeah.... Most of that stuff's just protective. There's an issue that if you don't get those URLs and trademarks some guy squats on them and eventually you have to pay him a bunch of money. As far as brands go, they have some value. There's no question that in some markets, like iPhone for example, it is pretty important. The iPhone App Store is such a Darwinian environment where stuff comes out there and if you can't immediately get onto the top 10 charts you can easily just vanish. There's no real way to market there, there's no real way to buy ads, so a brand is the only thing you have, the only predictable way to get yourself noticed on the App Store.
There's unpredictable ways – there's fluke hits like Angry Birds or Doodle Jumps that come out of nowhere, but again it's the lottery win thing. Those two have done well, they're good games, but there's tens of thousands of other games out there. There's a lot of luck involved.
If Plants vs Zombies had been released on the iPhone first, it might have disappeared without a trace, but because it had a recognisable brand, because it was released on PC and Mac first, that actually built up a lot of interest, so people bought it. And then you have that cycle where because it's on the top 10 a lot more people buy it. It's a bit unfair, the rich get richer syndrome, but there's nothing you can do about that. Apple can probably do better, they're trying to do stuff like Genius to help recommend things, and it might help give some things a bit of a long tail, but until something like that happens, you really have to do your best to get them into that top ten. So brand is important there.
I think it's less important in lots of other emerging areas. It's not particularly important on Facebook; people might believe that Bejewelled is doing well on Facebook because it's Bejewelled, but there's a lot of other branded games on Facebook that failed – from Tetris to FIFA and all these things like that. And they've all done poorly, or at best mediocre. The viral growth is much more important – it's the same in casual and downloadable games. The brand would get someone to try it, but it had very little effect on whether they would purchase anything or not. So it was less important than a game that had a high conversion rate. The good thing about the casual downloadable space was it really forced them to make good games, because there's no possible way to sucker someone.
Jason Kapalka is Chief Creative Officer and co-founder of PopCap Games. Interview by Alec Meer.