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A Face in the Crowd

Tue 15 Nov 2011 8:00am GMT / 3:00am EST / 12:00am PST

Facebook games boss Gareth Davis on a once in a lifetime opportunity to make all online content social

For some people Facebook is a collection of 500 million people, all shouting about what they've done today and trying to get you to harvest their zucchinis for you. For others it's the thoughts and interests of all of your closest friends and family, a place to share experiences and keep abreast of the lives of loved ones you're not lucky enough to see very often. But for Facebook, it's all business.

Whichever side of the divide you're on, it's hard to deny Facebook's massive impact on the development and future of the games industry. The driving force behind the social and casual gaming revolution, Facebook has birthed Zynga, given new life to Bejewelled and made farmers out of millions of us. Facebook has been a game changer.

So what's next? GamesIndustry.biz sat down with Gareth Davis, head of the Facebook games platform, to find out what's in store ahead of his keynote at Evolve in London this December.

Q: Looking back at some of your comments at the Game Developers Conference earlier this year, one of your main points was that Facebook games have now grown their audience to include almost every demographic. Do you think that's because developers have made a conscious effort to widen the market, or because more users are becoming aware of the phenomenon organically?

Gareth Davis: I think that there are a few things going on there. The first is that we have so many users now on Facebook that we can have really big niches. 100 million user niches. We see the emergence now of companies on Facebook who are building what they'd call a core game. Games targeted at people who played PC games back in the day, strategy games etcetera.

They're at the quality level now of those PC games. We think that area has really emerged in the last 18 months. Then you see, on the front of the more classic Facebook games, the 'ville games, that Cityville came out at the beginning of the year.

It has really high production values, it feels a lot like the SimCity games we played several years ago on the desktop. So the casual games have gone high quality too. Then you see the even lighter casual games, like the Bejewelled games, really doing well, games like Diner Dash and Triple Town, with simple, elegant mechanics that people can get into in just a few minutes, but can have a lot of fun with them.

"I think we've really seen the game developers understand that it's not one-size-fits-all, it's about different kinds of game for different audiences."

So I think we've really seen the game developers understand that it's not one-size-fits-all, it's about different kinds of game for different audiences. Another great example is the hidden object game, Gardens of Time. There's a genre that's been very popular on the web for a long time and finally someone has done a great version on Facebook and it's done really, really well.

So we're seeing this broadening now of the kinds of games and audiences and you can be very successful, creating different types of games and you can make a lot of money doing it. We're seeing a real maturing of the eco-system as people figure out the right opportunities and go after them.

Q: One of the biggest pieces of news for Facebook developers recently has been the re-jigging of the way that MAU and DAU numbers have been calculated. Was there any resistance from developers about changing that?

Gareth Davis: So the reality is that the numbers haven't actually changed at all, that's the key thing - it's really just how they're measured and reported. So the fundamentals are exactly the same. At the end of the day, your business doesn't change.

I think what we found is that there's a lot of alignment from the partners because developers have their own metrics as well, so they would see the different kind of metrics as well, internally. The users who are authenticating and the users who are landing. They use those to help optimise that conversion - if you've got a user who's landing, how do you encourage them to authenticate your game.

We actually felt pretty aligned with the developers. There's a service called AppData, which uses a lot of our data - they actually put out a statement saying that they supported the change in data reporting because it actually reflects the actual usage of the games, which is exactly what everybody wants.

"The reality is that the MAU and DAU numbers haven't actually changed at all, that's the key thing"

Q: Could that not have been an issue for Zynga preparing the IPO, though - investors seeing those numbers dropping sharply, even if it's just on paper?

Gareth Davis: My understanding is that they didn't report our numbers, they reported their numbers, so I don't think that there were any issues there.

Q: It seems odd that those users were included in the first place - was the original inclusion an oversight or intentional?

Gareth Davis: I just think it was the way that we did it when we started out. When we launched the platform in '07. Once you launch a platform you learn a lot as you go - I think it's a bit more consistent now with the way that we report our numbers - we wanted to align the third party numbers with the way we report ours.

It was really just more of an internal alignment issue. I don't think it was an oversight or a mistake or anything like that.

Q: The other big change you've made, certainly from a user perspective and I would imagine for developers too, was the limiting of feed notifications by games. Was that because you saw that proliferation as an unsustainable position? Was it having a negative effect?

Gareth Davis: The biggest problem we face today is the ability to discover new things. There's so much content out there. So many news stories, so many games, so many movies. How do I find the things that interest me?

What we've figured out is that Facebook can be a really powerful mechanism for social discovery and social distribution.

If a friend I know and trust, and is therefore close to me, is playing a game and enjoying it, there's a very good chance that I am interested in playing that game with that person. Therefore, my discovery of that game, not through external marketing but through my friends, is incredibly powerful.

So we're optimising our platform to provide that discovery and distribution for all types of content. Games have really proven the concept, at F8 we did a lot around music and video and news. We're seeing this mechanism be very effective. I think what you're referring to is that when we launched our platform all of our channels were open because we wanted to seed this mechanism and see it working.

What we found was, particularly around games, was that there are this group of people who love to play games, who spent a lot of time playing those games and share a lot about games to their friends. There's also a group who are okay about games, who are very casual players, then there's a group who are not very interested.

What we're doing is trying to put in place the right mechanisms that enable people to receive information based on their desire to view it. That's a complicated thing and it's taken several iterations to get it right. I think we're at that point now where, if you're not that interested in games, you don't see much game information, but if you're very interested you see a lot.

"We're optimising our platform to provide that discovery and distribution for all types of content"

We'll continue to dial that up and down based on all of the data we've received and the feedback we've received from our users. At the end of the day the key is to make sure the users are happy with their experience on Facebook. Make sure they're getting the right social discovery, that they're getting exposed to the right amount of things, that the mechanism works. Also making sure that we deliver sufficient distribution to our developers so that they can continue to build successful games and businesses.

I think as we've been tuning this the games industry on Facebook has been very successful. It's continued to be able to gain mass markets of users, tens of millions of users. They've worked out how to engage their users - the engagements levels have been way up over the last couple of years. And monetisation. They've really figured out how to provide the right things to the right people so that they're willing to pay for it.

So we're actually pretty happy with the way things are going - there's always a lot of work to do. We've got a dedicated games team here that's constantly looking at this and thinking about how to make it better. As we're now becoming effective with social distribution and discovery with news and music and video, we're learning a lot more about how to tune the system.

Q: I wanted to ask you about companies like Applifier, which operate purely within Facebook, but offer an alternative to some of your mechanisms - in Applifier's case it's discoverability. Do you see them as undermining or strengthening your offering?

Gareth Davis: As long as they abide by our platform's policies, we're all for it. There's always going to be pieces of the puzzle that we don't build. We've explicitly answered, with Mark Zuckerberg and Sheryl Sandberg on Charlie Rose, the question of whether Facebook was going to build games.

The answer was, no, we're not going to build games because games are really hard to build and our expertise is in building the platform. So we are 100 per cent focused on building the best possible platform to enable developers to build social experiences everywhere, particularly mobile, today.

That's our focus, when there are opportunities for third parties to build systems, like games, or mechanisms to help discover games, that's awesome.

Q: Do you feel that the run on social and casual games company IPOs has ended? Has Zynga left it too late?

"We're at the beginning of a once in a lifetime, maybe once in history shift for all online experiences going social."

Gareth Davis: Well I'm not going to comment on any company's valuation, including our own. I think the key is to look at the fundamentals of the business, at Facebook we continue to grow very rapidly. Our number of users in terms of engagement and monetisation are both up and to the right.

What's interesting is that we feel like we're just getting started. It's still very very early. We're at the beginning of a once in a lifetime, maybe once in history shift for all online experiences going social and social experiences being everywhere. So I view us as being very very early, and there being a ton of growth ahead of us.

No-one can control a valuation, that's a market-driven thing. I think the most important thing is where you're going to be in the long run. I feel very good about Facebook. When I look at what's happened in the social games industry, there's a tremendous amount of value that's been created in just a few years by building social games on the Facebook platform. We think that's awesome. We think that's going to continue.

There are many more companies to grow and do well in the industry. I think the key is that there's real revenue here.

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