Core videogames has been an uneven time for Disney of late, with Epic Mickey underperforming and UK studio Black Rock suffering sudden closure. However, one area that is safe for the House of Mouse is Club Penguin, a kid-focused online world that remains big business despite increasing competition from upstarts like Moshi Monsters.
GamesIndustry.biz spoke to Jeff Jones, Disney's vice president and general manager of Digital Games, about Club Penguin's status within the company as a whole, the rise and threat of mobile and social, and when we can expect to see traditional Disney properties explore similar territory.
Q:Disney's games portfolio has been through some major changes lately - which parts of the business are you heading up, specifically?
Jeff Jones: I'm the general manger of digital games for Europe, the Middle East and Africa, so I have the portfolio of Club Penguin and other virtual worlds we're looking at, plus our social games that we got through Playdom and also the apps from a whole raft of different sources on iOS and Android. We're also starting to think about some of the future technologies like TV apps and streaming gaming, etcetera.
Club Penguin, I remember when, pretty much a few months after it launched, I started to pick up on the uptake in it and was going in trying to work out what the heck it was all about. So I was one of the early advocates of us looking at Club Penguin. I then worked on the acquisition, and then when we set up the first office internationally in Brighton I really worked on that; getting the team up and running, getting a new framework for that. Then I stepped away for a while, and last year or so came back to take more of a GM role on that. So I've been with it almost as long as the founders, but not quite.
Q:Is it your major responsibility, or just one small part of it?
Jeff Jones:It's 50 per cent of my responsibility. That's because it's just continuing to perform extremely well. The market is certainly getting a bit livelier in terms of competition, but we're still up and around number one in the UK and certainly across the whole of Europe we're the number one site. We just announced 150 million kids have signed up for Club Penguin, and frankly that's an old stat now. We're still getting a rapid level of sign-up.
Q:What proportion of those are playing regularly?
Jeff Jones:We have pretty clear stats on how the game is performing. Indicatively at the moment, roughly 30 per cent of kids in the target demographic of 6-12 are playing Club Penguin pretty much every two months. There was a report came out this morning from Mintel that said Club Penguin is the most popular site for kids after Facebook and Twitter. So, it continues to be, even though it's our sixth birthday last week, a very strong performer here in the UK, and we're growing in Europe. We are truly a European business - we've got French, Spanish, Portuguese, and we're making an announcement soon about another language.
Q:What's the main source of the growth? Word of mouth? Constant SEO battling?
Jeff Jones:It's a really interesting question. I think for the last six years it has been almost entirely word of mouth. We have had some strong partnerships with sites such as MiniClip who continue to provide us with a feed of consumers, but it has really been a word of mouth thing.
Some search engine optimisation, a little bit of search marketing, but what we've seen over the last year is a lot of new entrants coming in with much more aggressive, above the line marketing campaigns. So that's starting to change the business a little bit. But for the main part, it's been that kind of classic network effect that people talk about these things, and once children get into it they start to get evangelical about it, get their friends onto the service. Social groups start to form around it.
Q:What's the major type of competition? Other online games like Free Realms and Maple Story, or Facebook games like FarmVille?
Jeff Jones:Our sense is that the social games that you see on Facebook are not... well, obviously children under 13 aren't supposed to be on that platform.
Q:No doubt a lot of them are finding a way, of course...
Jeff Jones:Yes. But our sense is that it's competition for more immersive games, because frankly the social gaming experience that's presented on Facebook is very much an adult-orientated sort of environment. The whole mechanics are designed to engage with an adult audience, and the sort of gameplay that appeals to children and the social experience that appeals is all around play and a much more dynamic environment.
Q:As opposed to just clicking and waiting...
Jeff Jones:Yes, as opposed to farming. I think the competition's more from other types of virtual worlds. Increasingly obviously, kids' time is being spent across other platforms - touch devices coming in is competition for their finite amount of play time.
A:How much of a risk is there of your userbase becoming older and moving on to more adult-orientated games? How confident are you there'll be a newer generation coming up behind?
Jeff Jones: Well, yeah, definitely we see that general phenomenon of children ageing out of the target demographic, transitioning to the Worlds of Warcrafts and things. So that is a continual challenge of targeting a younger demographic, because they age into it and age out of it, so you have to continually work hard to engage with new audiences.
But the interesting thing is that we do see a lot of kids keep coming back. Club Penguin is unique in that it is has a whole programme of events throughout the year - at the moment we've got a live Halloween party, which is the most popular [in-game] party of the year. We completely reskin the whole world, there are whole new experiences, lots of new games and things to play. Kids really get hooked into and will come back who we haven't seen for quite some time.
A:Is it a matter of hooking them in with new collectibles?
Jeff Jones: The thing that few people get is what a social experience it is for kids versus what a social experience is for adults. The social experience for kids is play; you go round to a friend's to have a coffee and look at holiday photos, maybe, but kids go round to their friends' to play. It's really about that experience part - yes, there are new costumes and things like that too, but a key thing is that it's a world where kids' imaginations really take over.
We had a winter party, and to an adult just coming in cold it was a very straightforward environment, but you see what the children were talking about and they're imagining avalanches, wolves, the forest chasing them... None of this was actually there, but if you leave enough space in the environment their imagination actually goes wild.
A:How much of a barrier to upping the game's technology is that? Make things photo real and it could interfere with the scope for imagination.
Jeff Jones:I think children are very comfortable with the look and feel that they're got there. We're seeing a cartoon-like animation but they're [gestures to sports scene on-screen] seeing a whole audience in the stadium, hearing applause, it's like Wembley for them. We're very intent on keeping that alive.
A:What's your plan for growing the audience further? Would you partner with a social network?
Jeff Jones:Certainly we wouldn't go into any environment which was not appropriate for under 13s, so there's no intent to put it into that situation. As other platforms are becoming more popular, we're definitely looking at taking this into those platforms. We had a couple of titles on the Wii and the DS that have been incredibly popular in the past, and then two months ago we launched PuffleLauncher on the iOS, which is based on a game that's incredibly popular in the world.
We've taken that out and onto the iOS platform, completely rebuilt it, made it much more for that platform experience, but linked it back - so you can register your Penguin, and as you collect the coins in the game they feed back into your account within the virtual world. Similarly so for the DS and the Wii. I certainly see that connectivity getting more cohesive.
A:Are those apps revenue drivers in and of themselves, or more to do with keeping people attached to the core game?
Jeff Jones:Both, to be honest. They're definitely built as a business, as a premium product, but they are allowing people to stay engaged with Club Penguin when they're out and about or on a different device. And yeah, it went to number one across most of the markets in Europe. And you'll see more of that, in terms of mobile, from Club Penguin next year.
A:For Disney as a whole, how important is Club Penguin to the overall interactive side of the business? Is it the jewel in the crown?
Jeff Jones:We continue to be focused across the whole range of games, so we have a console side as well as the more digital side that I focus on, and both sides are performing well and continuing to show growth. There's a pretty even split at the moment in terms of how they're performing. Obviously we've got Marvel, which is a great franchise for the gaming world.
A:Most of that's still tied up with other licensees, isn't it - Disney doesn't get to do its own thing with those properties until existing deals have wound up?
Jeff Jones:Yeah. I mean, prior to acquiring Marvel, some of the various franchises had been licensed out to other parties, so that's still the current situation to a large extent. But obviously they've got a great many superheroes, so... But Club Penguin continues to be a great performer and one we strongly believe in. Six years on that's pretty impressive - especially as online is moving fast, kids are moving fast, but Penguin is still going strong. And it's becoming a broader product range - it's already out there in books and magazines and toys.
A:Is Marvel Superhero Squadron going to come under your umbrella at all?
Jeff Jones:That's actually licensed by Marvel to Gazillion before we acquired Marvel, so that's sort of outside of the fold.
A:Any worry about that cannibalising your audience?
Jeff Jones:I think that is going for a roughly similar demographic, so we'll see how it goes. I think the good thing is that bringing good content into this demographic is positive for the market, because it builds the market and children largely stay with Club Penguin, but they are playing other games as well, so having another title in the sector that we at least have a commercial relationship with is a positive.
A:You're looking at mobile, but what are you thoughts in terms of future platforms - mobile, IPTV, cloud gaming. Which is most appealing?
Jeff Jones:I think the iOS platform is the key platform for us. Obviously we're investing in all of them and continue to do so, but the iOS is a key platform for us. We're seeing more and more kids getting [an iPod Touch]; it'd be great to see Android shift from being a phone platform to being an app and gaming platform, but iOS is key for us. Maybe it's a small sample, because most of the Disney management tend to have their iPads and things lying around, so they see their kids getting on that very quickly, but not every household is so blessed.
A:Are you worried that the App Store is too busy now for even a big player like Disney to make itself heard?
Jeff Jones:It is always a challenge, but the unique thing Disney has is a brand that people trust, and second we have the IP, the franchises, such as Club Penguin, which are increasingly being leveraged in consumer products, maybe in TV programs. So they naturally gravitate to it, and by connecting the experience between these things you can redeem... you get unlock codes in the books, and you get new experiences in the game. It gives us an opportunity to break through the noise we're seeing in the app world, which is obviously a very fragmented place, very fast-moving, so you have to work hard to maintain a position there.
A:Is there any interest within Disney in doing anything similar with its more traditional IPs?
Jeff Jones:Yeah, we've launched PixieHollow as another virtual world, which is based around the Disney fairies like Tinkerbell who were brought together on DVDs. Looking forward, we will absolutely continue to do it.
A:What's the state of play with the other Disney virtual world, Toon Town?
Jeff Jones:That's still going. That has a very loyal core of followers, mainly in the US. Not a huge number, but it's certainly one that's very deeply engaged so that stays there.
A:Are you happy to leave it simmering like that, rather than trying to update and reignite it?
Jeff Jones:At this stage, there's no plans to do that. And similarly so, we have the Pirates of the Caribbean virtual world which has a loyal cohort of people who were playing it intensively. We've experimented with a variety of ways of taking franchises into the virtual world arena, and we've got a lot more ideas to come in that regard.