PapayaMobile evangelist Oscar Clark explains what's changing in mobile gaming, and why you need to know about it
Oscar Clark's job title at PapayaMobile is evangelist, and while unconventional it perfectly suits his enthusiastic approach at the mobile social gaming network. The network offers social gaming features, a social game engine and monestisation across Android and iOS, and in November announced a new partnership with mobile advertising specialists Tapjoy.
As well as being a professional evangelist he's also founder and MD of Rocket Lolly Games, and his career history includes time as a Home architect with Sony Computer Entertainment, as well as roles with nVidia and Three. GamesIndustry.biz spoke to Clark at the recent Game Connection Europe conference, where he was keen to talk about PapayaMobile's current initiatives, and the changes he's seen in the mobile landscape during his career.
Q: You launched the Gateway to China programme in July. How is it progressing?
Oscar Clark: We've got about a hundred games and what we've found is we've grown from, when I joined in April, about 18 million users, and we're now 37 million. And we've got an average revenue per paying user, calculated last month, of $16.45.
So we know we've got an audience that pays, but the really interesting thing is that we don't actually announce our Chinese numbers, and the reason is that that number is relatively low compared to the rest of Europe, because they haven't had Android devices as long in China. And also smartphone penetration is slightly different. But it's growing so fast. It's amazing, it's already the second largest market in the world for Apple downloads.
So it's a really weird stage with China, which is that now is good numbers but it's a brand building exercise. So we're seeing people coming to us because it's so complicated to deal with the 70 or so different app stores, the three operators, ten or so handset manufacturer's all of who have their own app stores. It's all very messy. You have to have local knowledge, and there's no Facebook or Twitter so how the hell do you do any marketing nowadays without those? Of course there are equivalents, but the trick with all of these things, even outside China, is that unless you're focused on local knowledge, how can you have local people interested?
Pirating is really people saying they love your gameplay, and there's a massive compliment in that
We're in such a privileged position to be in the UK because basically the US guys understand where we come from, and not just language. We've absorbed so much American culture, and who are the biggest audience for gaming content in the world? Well it's the US and UK. But of course that's being challenged now by the Asian markets.
Key thing is Gateway To China has become this great Trojan Horse for us, because people want to get into China, they want to make their game social because that's where the money is everywhere, and they might as well work with Papaya. So now we've got something like 400 games at the moment, and a lot of those are Chinese based, but people are starting to give us great content.
And the key is we're great at giving you access to a social graph, a bit like the old days on Facebook - here's a whole bunch of people that like playing games, that play games on their Android devices already, and they share conversations together already. Oh and by the way, that means when they like a game that means they tell all their friends, and you get to show them which of their friends are playing that game. You can get them to meet each other in the game, on their phone, without having to leave the app. And I think that's a really underestimated value, the fact that I don't have to leave the app. I don't have to change my mode of use of a device.
To cut a long story short it's been great because people have gone "this has been the final reason why we must go with Papaya, because we get all the social stuff, but actually this gets us into China as well," so it's been a great programme from that point of view.
Q: Do you think more traditional developers and publishers have missed the potential of the Asian markets?
Oscar Clark: I think it's that when you live in a premium world, and obviously I've got background in consoles as well as mobile, a premium model is basically putting all the value in the asset that's most easily distributed. So obviously there's lots of complaints in the console world about piracy and, don't get me wrong, there are great laws in China to deal with protecting trademarks, it's just that there is still an issue with copycat content. And enforcing that is problematic.
So what's happening is that the whole market is built around people getting access to content really fast, because there are fantastic developers in China who just want to play and make great content. If you don't put the value in the server, you're stuffed. Actually, pirating is really people saying they love your gameplay, and there's a massive compliment in that. And instead of going up in arms - let's not be like the music industry and the film industry and punish the people that love our content - let's find another way to make that make revenue.
And the beauty of games is that actually we can do that, because we can build server side connections. And the beauty of social is that we give you a reason to want to spend money, because they can show off to their friends. And that puts all the value not in the thing that's easily distributed, but in the thing that's really hard, the central server.
So let people pirate a free-to-play game because that's good, that's distribution, that means that they're loving the game, that they're sharing that game with their friends. But if they have to connect back to the server to get the value... because if you're playing a pirate game are you really going to part with your credit card details? To a pirate game server? I don't believe that. You want trust.
So that's the joy. Server side is all about putting the money where the trust is. And you build a service like Papaya, and build that trust element, show them that it's okay to spend money. That's why we have virtual currency. There's nothing complicated about it. if you have a virtual currency you can give them free currency to learn that the process is safe to use. Without them risking their own money, their credit card details.
If you come from a market where it's all about the Blu-ray disc, of course it's going to take you time to work out how to make value from the Chinese market, because you put your value in the most vulnerable piece of the puzzle
So the issue is if you come from a market where it's all about the Blu-ray disc, of course it's going to take you time to work out how to make value from the Chinese market, because you put your value in the most vulnerable piece of the puzzle. Put the service at the heart of the experience, and that changes everything. And I think that's why PlayStation Home is so much fun, because it was great being at that edge of console that was trying this new way of thinking. And hopefully we'll see a lot more of it.
I think it's that cut and dry. The thing about the music guys and the movie guys is that they were struggling for years to say "don't steal," even back in old days saying "taping is killing live music." We didn't believe it then, and live music still survived. In fact, there's as much music in areas of the world that have no copyright protection, there's much more innovation in some ways going on there, and to a large extent you could argue that in some cases copyright protection is inhibiting creativity.
I don't quite believe that, but the bottom line is that at the end of the day there's whole bunch of people that love content, [so] let's find ways to make them enjoy it where everyone wins. Because they don't just want to steal from you. "I want content because I want content, and I'm happy to pay for content, what it's worth." But it's hard for people to understand what you're actually selling these days, because we're not in the physical goods world anymore, but digital goods, and you have to work out that actually "I'm not selling a game, I'm selling an entertainment experience. I'm not selling a game mechanic, I'm selling the goods that make it easier for people to show off with the gameplay mechanic, or that can reduce the grind in the gameplay mechanic."
And that means having to step back, and that's quite hard to do when all you're doing is making the best possible game you can.
Q: I'll be interested to see what happens with Vita in the mobile market?
Oscar Clark: I've gone on record saying I'm not a believer. Where I have stepped on that is the one thing that console can now represent is a DRM device. That means because I can only get that content on that device, that's a a reason to buy it. The question is given the world of the internet and connected services is that a viable model moving forward? And I'm not convinced that having a restricted access device is as valuable a business model as having experiences that are tuned to the mode of use of every device, where the experience is different but shareable.
We'll always have the Call Of Duties, because they satisfy a user need. I want to be entertained in this situation, here are the tools I've got to be entertained on. Surely there's more money to be made on that than to have that box. Controversial though that may be, given that I'm ex-Sony.
Q: What differences do you see between Android and iOS?
Oscar Clark: One of my favourite subjects. On the surface, iPhone: X number of million users, and an app store that's well managed and populated, and every one's got a credit card. That must be better mustn't it? I don't think so. I don't think that the app store changes often enough, it's not well managed. How often do you go into the app store and it hasn't changed a week later? I've gone in and seen the same content on the front page that I saw a month before. And one thing I learned working at Three is I have a top ten list of best selling games, they're the only games that sell. If I have a new list everyday of games that are recommended, I sold a whole bunch more games.
In China there's 70 different app stores, and that allows 70 or so different editorial voices. The likelihood of you being able to find somebody who shares your view of content goes up.
You can't do the managed app store like I could at Three, but there's some lessons to be learned from what we got right in those operator days - we didn't get everything wrong. We may have been terrible in the revenue share that we gave, and that was partly my fault - I was the guy that did the 60 per cent revenue share - but the bottom line was we generated revenue because we managed the service. It was unscalable, but there is some real innovation that needs to happen here, and either they're going to do it or someone else is going to do. The trick on iPhone is that they've got that summed up, but that's not summed up on Android.
So I think Android is where the really big opportunities are right now. Not only are the numbers going through the roof in terms of who has a device, not only is the build quality of the devices going up, not only is the capability of the UI, the customer friendliness of the experience gone up, but the irony is it's so much easier to promote and manage your content for yourself.
I'm not a huge fan of the Google Marketplace either - I think its got its own issues - but the fact that it's not the only shop in town is I think its biggest strength. And I'm sure the Google guys will do whatever they can to make their store as good as possible, but I love the fact that they've got competition with Amazon, with all these other new companies. Like I said, in China there's 70 different app stores, because what that allows is 70 or so different editorial voices, and the likelihood of you being able to find somebody who shares your view of content goes up.
But even bigger than that I think the role is going to come down to not the app store, but the social layer. And actually I've almost stopped bothering going to app stores and I'm now looking at my Papaya newsfeed to see the games that are interesting and what other people are playing. And that's driving it, because social discovery is way more accurate than any editor. So I'm personally thinking that the real joy is that I've got so much more scope on Android to play with marketing.
But I've got a downside, and the downside is you can't guarantee the user has a credit card, therefore I can't guarantee how they're going to pay. But again that comes back to the social services side; I know that I can train users to trust the programme and the currency, and that means that they'll pass over their payment details whether it's Google Checkout, credit card, Paypal.
There's whole bunch of people out there who don't have a credit card but who do have a Paypal account or pre-paid cards, and the interesting thing is everybody is so excited what we can make in terms of revenue right now in Apple or whatever else and that to me is just the tip of the iceberg, it's the guys who have got a credit card. And that works in in the US, it doesn't work in Germany, it doesn't work in China, so of course there are people who do, but for most it's just another barrier to people spending money.
The bottom line is discovery and it's going to come through other things than the app stores.
So the bottom line is discovery. It's going to come through other things than the app stores. I think this is going to be an interesting debate over the next year or so because there's a lot of questions over what happens with HTML5, what happens with things like Amazon, and want happens with the device manufacturers?
Q: So give it another year and that mobile landscape could be unrecognisable?
Oscar Clark: I think the fascinating thing is that I was doing mobile five years ago, and in those five years it's completely changed. Operators were gods, now they're useful but a little unsure of where their place in the chain is. I think they'll always have a place - there's a really important part of their relationship with the customers that has yet to be re-found - but we have to define what that is. The app stores from Android and Apple are there, but the bottom line is every week now something new is changing the way the market works. Gree buying up OpenFeint, DeNA and ngmoco, the hottest space right now is the one we're sitting in with Papaya. We're sitting there with an audience who love games, and they want to spend money. But they're quite discerning, and they want to spend money on something that's entertaining, and the hard part is for people to understand how best to use that.
Q: You collaborated with Tapjoy recently. Can you tell me a bit more about that relationship?
Oscar Clark: Now that's fascinating, a great example of where the evolution is changing. So obviously, Tapjoy, there have been some really interesting discussions about the role of incentivised downloads, some positive, some negative, and I think people that are looking at it probably don't understand what's going on in the marketplace.
If you think about it we started with premium games, so back in the day I was charging £6 to download a game, but essentially in the app store things when from that £6 to 59p pretty damn quickly. The reason was you had to have some reason to get the customer past the barrier of paying. Then freemium comes along, and people started saying "I'll look at the free stuff, because there's no barrier to me downloading it." And now we're getting to the stage where, is free enough to get someone to download your game? Given that there might be a thousand games that are all equally good and free? Some are going to be excellent, but how do you know which ones are excellent and which aren't?
You get to a stage where actually you want to incentivise people to download it. And you could look at that as buying customers, but I think that's completely misunderstanding what this does if you're using virtual currency. And this is why Android is so much better as a market for us as a development community, not just Papaya. What incentivised download can do is give you virtual currency to play the game, and what that is is the developer saying that its game is so good that its prepared to give you some starting money to play the game. That's entirely good. The money doesn't go anywhere else. It's either going to get spent on the game I'm currently playing that I see the promotion in, or it's going to get spent in the game I see promoted. It has value, but that money is being fed into the community. And if they like that game they will go on and spend more money.
There's a Darwinian opportunity in Android. You've got to work harder but if you do the rewards are there.
If you look at that value chain working with incentivised downloads like Tapjoy it's brilliant. But then we wanted to do something a bit different, and go a bit further. If you can apply your social graph to the offers that you're presenting, so some of your friends are playing this game, the likelihood that you want that offer instead of something else goes up, so there's a reason you spend time with people, and that's because you have a shared interest. And if you have a shared interest the likelihood that they'll be more than one interest that you share, and the offer will be more relevant to you. And the one rule of anything like this, is how relevant is it? If you want to get advertising to work, it has to be relevant to that user.
So it's a fantastic arrangement that we've got with the Tapjoy guys, I'm really interested to see what happens with it. I think it's just going to completely change the way that people feel about incentivised downloads. The question is, obviously, we have to worry about what we're going to do with Apple, but I genuinely think that Apple need to understand the context in which these kind of things are done. And I think they quite rightly want to protect their audience, but we want to show them that there are opportunities to make the audience have a better time, if you have a well managed virtual currency, and if you have well managed incentivised downloads. So obviously we have to play nice with Apple, and we have a great relationship with them, but I think the opportunity right now is in Android.
Because we can experiment with new models, we can experiment with this integrations between the social and the incentivised download, and I think we will end up having to compete harder, and therefore evolve faster, in the Android market. And those games that do that well in Android are going to be a much better business model than is currently available with Apple. That's a personal view though! The inherent issue of the Android market, namely credit cards, are actually long term strengths because it means if you're creating content for that platform, you have to learn every trick about understanding every trick about marketing that experience, how users are motivated. Because if you don't understand those things you can't compete as effectively, you can't get the same revenue return.
There's a Darwinian opportunity in Android. Namely that you've got to work harder but if you do the rewards are there. And actually the rewards will give you benefits not just in the Android market in the long run.
Q: So what will Papaya Mobile be concentrating on in 2012?
Oscar Clark: Our growth has been enormous, we've blown away all expectations. Going from 18 to 37 million is mind blowing, and we're still about 68 per cent in the US as well, so it's all good. And I think what we've worked out is that it's those guys who really understand social games, that really understand the difference between a Facebook or online social game and a mobile game, those guys, we want to nurture them. The more that we can learn from what they do we can help them with getting their content distributed and discovered, monetised.
We want people to come away having had a great time playing these games. We don't want them to end up with a hangover afterwards.
I think those guys are going be generating the value, and we're seeing a great load of pipeline, initially small companies, trying it out, but we're starting to see some really nice names of companies that are thinking the time has come, premium versus freemium argument has been done, freemium has won hands down in mobile particularly, Android more so, in China even more so, so therefore we have to adopt this. So what that really means is we have to get back to who the customer is, and remember that they want to be entertained, and they want to be able to show to their friends what they've got out of an experience.
So that I think is where we'll end up focusing, we just want to nurture those kind of social games and get people excited about the potential and at the end of the day we want people to come away having had a great time playing these games. We don't want them to end up with a hangover afterwards, like we're seeing with the Facebook model, where you play quite an interesting social mechanic, but not always the same kind of long term rewarding game experience that you might want.
I'm not trying to point fingers at any particular game, but the game design models are very different, and if you're constantly playing a psychological war game with your customer, that could be a problem. Let's help them enjoy their content, and give them reasons to spend whatever money they're willing to share while enjoying that content, and what an amazing role that is.
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