Wooga: "We love platforms that are hundreds of millions of users"
CEO of the fourth largest social game company, Jens Begemann, on the company's focus on mobile platforms
The social game space is changing, as Facebook's growth slows and the overall number of players seems to be stabilizing. The two top companies, Zynga, and King.com, have markedly different strategies for creating games and trying to thrive in a market that's no longer growing at breakneck speed. The third largest company in the social game market is Electronic Arts, and close on their heels is Berlin-based game company Wooga.
Wooga was founded in 2009 by Jens Begemann, Philipp Moeser and Patrick Paulisch in Berlin and has grown rapidly. Wooga is currently the fourth largest social games developer, as measured by monthly active users (MAU); they have some 39 million MAU as measured by AppData. Their games include titles such as Diamond Dash and Monster World, with the kind of cute broad-appeal graphics that support their goal of creating "computer games for everyone."
GamesIndustry International spoke recently with Wooga CEO Jens Begemann to find out how it is coping with the changes in the social game marketplace.
Q: You recently announced your mobile strategy; tell us about it.
Jens Begemann: We are bringing Diamond Dash to Android and we're launching Monster World on the iPhone and iPad. We're coming from being a Facebook company, doing games for the PC, now we're investing heavily into mobile. The games we're doing in mobile, we're also taking advantage of Facebook Connect there because we believe social games are now ready for mobile. Mobile games so far have been mostly single player, and now they're becoming social. We see so much growth there, and we're very excited to bring our games to Android and iOS.
Q: You've had games on iOS for a while now, haven't you?
Jens Begemann: We launched Diamond Dash, our first game for iOS, in December for the iPhone and the iPad. That was a game that we became huge on Facebook.com on the PC. It has been far beyond our expectations; we saw 20 million downloads so. We thought that maybe we would see an initial spike and it would flatten out quickly, but even now, seven months after launch, we still see seven-digit download figures every month. That has made us more confident to invest much much more into mobile. We're a bit over 200 employees now, and out of these 200 employees now half of them work on mobile titles. Expect much, much more from us on mobile in the next few months.
"We're a bit over 200 employees now, and out of these 200 employees now half of them work on mobile titles"
Q: How would you characterize the monetization rate for your games on mobile platforms as opposed to the games on Facebook?
Jens Begemann: What you see - and we see this from other developers we talk to - is that typically, for most games on Facebook.com, you see a higher number of users than you see for the same game on a mobile device, but revenue per user is usually higher on mobile. We have these two contradictory effects, and depending on the particular title the absolute revenue can be higher on the PC or it can be higher on mobile.
Q: If you you're getting more per user on mobile, and mobile platforms are growing much more rapidly than Facebook, that explains why half of your employees are now working on mobile titles, doesn't it?
Jens Begemann: We are very, very long-term oriented, and we want to be where our users are. We love platforms that are hundreds of millions of users, not millions of users. Facebook.com on the PC, and iOS, and Android, have now hundreds of millions of users, and that's where we want to be. That's our primary way of thinking; we're here for the long term, not revenues in the next quarter.
Q: Who is the audience for your games; what's your typical demographic?
Jens Begemann: About 70% of our users are women,and the age range is very very broad. The oldest Monster World player that we know of, who plays every day, is ninety-three.
Q: Do you see the demographic being different on mobile?
Jens Begemann: It's very similar. We also see people who play during the lunch break on their PC and during the evening on their smartphone or tablet.
Q: Are you going to be able to connect the gamer's identity and game information between mobile and PC platforms, so I can keep my virtual items and game progress?
"If everybody's already on Facebook it's very difficult to add more"
Jens Begemann: Yes, that's exactly the case. If you look at Diamond Dash, for example, we're already doing that across iOS and the PC since December. We're now extending that, so you can actually play with your iPhone or your Galaxy S III on your way to work, in the lunch break you can play on your PC, in the evening you can be playing on your Nexus 7 or your iPad; your progress will be transferred, everything will be transferred. Everything seamless, in the background, and it even works offline. So even if you don't have an internet connection when you play, the next time you play everything is synced back to the service. There's quite a lot of engineering that went into this.
Q: Facebook seems to have peaked in North America; does that affect your growth potential?
Jens Begemann: I think if you have a penetration where virtually every internet user in a country is also a Facebook user, then naturally you don't see growth any more in terms of active users. But there's still growth in activity and there's still growth in revenue. I think it's just a natural effect that if everybody's already on Facebook it's very difficult to add more.
Q: How is Facebook doing in Europe; is that reaching a similar state?
Jens Begemann: In many European countries it's quite similar to the US. Over the last few years, especially Scandinavia and the UK, the penetration has been extremely similar to the US. There are countries like Germany, for example, where there still is a lot of growth. In Eastern Europe, especially, there's also a lot of growth, and in many other regions of the world such as Asia there's a lot of growth. I think Facebook shouldn't be judged in terms of active users, because once you reach a billion active users it's more about the activity of those people, and your goal shouldn't be adding more, though of course that is nice if it's possible.
Q: Some analysts have said that the entire social game market has flattened; it's not adding more users. Is there growth left for social games on Facebook, or are mobile platforms the only opportunity for growth in the future?
Q: Do you see a better opportunity on tablets or on smartphones, or are they about the same for you?
Jens Begemann: Both are growing extremely well. We are tailoring the game experience to the devices to make them different. Even though you can play the game cross-device, we still optimize the user interface uniquely for the smartphone or for the tablet. I think only when you do that do you have success. We definitely see different user patterns; the smartphone experience has to be optimized for the Starbucks waiting queue, and the tablet user experience has to be optimized for the user sitting on the couch while the TV is running in the background.
"I believe tablets to a large degree will replace laptops in the home in the next few years"
Q: For some games, like Monster World, the larger area of the tablet screen makes it easier to play than on a smartphone. Does that make designing the same game for both platforms difficult?
Jens Begemann: It's a big challenge, but one of the key things is making the user interface go into the background and only display when you need it, so all of this real estate can be really used for the game play area. Using very smart ways you can zoom in and out very nicely, and making sure that the graphics are designed very nicely so you can play it when it is very small. It actually works very well; I've been playing it a lot the last few weeks, and it's very addictive.
Q: Riccardo Zacconi, CEO of King.com, said their strategy is to develop games with 3 people in 3 months, introduce 18 new games a year and see which are popular. On the other hand, Mark Pincus of Zynga said that The Ville cost over $10 million to develop and took over two years to create. What do you think of these strategies, and where does Wooga's strategy fit into that spectrum?
Jens Begemann: When we create a new game, it always starts with the person first. We don't start with the game idea, we start the person that we trust who would be the product lead for this new game. Then instead of developing a game in three months and then putting it out, what we do is prototype. This person alone, or with a team of three or four people, creates prototypes. The goal is to create a new prototype every two weeks, play it internally, invite users to the office who play it and watch them play, and iterate on these prototypes. They don't have any graphics, they don't have anything fancy; they're extremely bare-bone, black-and-white and simple. Once we've found something there in this prototype, then we create a game that is fleshed out and polished and really lives up to our quality standards, and then we bring it out. That's what we don, with small teams, and so far it has worked really, really well.
Q: When you create new games now, are you creating them first for mobile or Facebook, or aiming them at both?
Jens Begemann: What we have announced so far are games that have millions of users on Facebook and we're bringing them to mobile, because our fans have just been begging us to do that. For new games, we actually do both. We've got new games in development that will launch on the PC platform first, and also new games that will launch on mobile first and take advantage of Facebook on that platform. Overall, most of our games will be cross-platform and will be an experience where you can play on any of these devices and play together and play socially.
Q: Do you see Android as an equal opportunity to iOS?
Jens Begemann: We will see. I'm very, very excited about Diamond Dash now coming to Android, where lots of our fans and users have been asking for it. It's a great platform with an amazing number of devices out there. Fragmentation is definitely an issue. We don't want to create Android apps that feel as if they were ported. We want to create Android games that feel like they are natively built for Android, and achieving that across many different devices is a challenge. We very much appreciate what Google is doing to make that easier and to reduce fragmentation. How big that will be, we will see, but we're very excited.
Q: What do you think about the Nexus 7 and other 7 inch tablets that look like they're going to be very popular this Christmas?
Jens Begemann: I think the Nexus 7 is great; Diamond Dash looks great on the Nexus 7. I think what is a very important step is that a high-quality tablet is now out there for $200. That will open this category to many new users who previously wouldn't have thought about buying a tablet. I think it will obviously grow the 7 inch category, but I think it will also introduce people to tablets who may end up buying a $500 iPad in the end. Overall I believe it will grow tablets a lot, and I believe tablets to a large degree will replace laptops in the home in the next few years; probably to a large degree in the next 18 months.
Q: What about the prospect of putting your games on connected TVs, either a smart TV or by sending a smartphone or a tablet image to the TV; will that necessitate a rethinking of your games?
" I don't think smart TVs will be as big of a platform for casual games as tablets or smartphones"
Jens Begemann: I believe that smart TVs will be disruptive for the way we watch video, movies and TV. Linear TV will be disrupted by people putting together their own TV channels. I believe we will see lots of innovation there that is connected to what the consoles are doing, by moving the processing to the cloud and having a very thin client. Regarding casual games, I don't think smart TVs will be as big of a platform for casual games as tablets or smartphones, for various reasons. One of them being that you replace your smartphone every 18 to 24 months, on a smart TV it's more like every 5 to 10 years. Other reasons being that for a casual game you often like to play while watching TV; you don't want to take up your TV screen because then you can only do one thing. A family sitting in front of the TV and watching a program together, one or two of them is only paying half attention because they're playing a game on their mobile platform. That's something we have to pay attention to in the future.
Q: Your games are designed to appeal to a very wide demographic. Do you think you might make some games that are more narrowly focused, or targets a different demographic?
Jens Begemann: We love our audience because we feel it's underserved. These people don't get as many high-quality games as a 15 year old male gamer does, and therefore we love them and want to continue to serve them. But, in the future you will see games from us that will go towards a slightly different segment. Not completely away from that, but that broaden our audience compared to what we have done so far, and also with a visual style that has a slightly different appearance. It will always be, at least in the foreseeable future, mass-market.
Q: Another difference between Wooga and other companies like King.com, which has opened offices in many countries, is that you have chosen to concentrate your development efforts in one place. Will that change over time? What are the advantages or disadvantages of doing that?
Jens Begemann: We are extremely happy and big believers with our model of having everyone in Berlin. We have over 200 employees, and they come from over 30 nations, and they all are in the same building in Berlin, which is this old baking factory, it's an amazing building. More than half of all the people we hire move from other countries to be in Berlin. We don't hire in Berlin, we hire for Berlin. That allows us to have this extremely creative atmosphere, from the best people from all over the world working closely together. It allows us to learn from each other extremely quickly. If you have different offices in different cities, you tend to end up having silos. What we have instead is independent teams, but they learn from each other, and they collaborate, and they talk to each other a lot, and that helps us to move faster and innovate. The teams work very concentrated on their game 90 percent of the time, and 10 percent of the time we channel the communication in such a way that the learning between the teams are exchanged. For the employees, it allows great career opportunities, because you can work in one game, and after a year or two move on to a very different game, and you don't have to live in a different city.
Q: Looking at the market as a whole, do you see a rising tide lifting all boats, or do you feel the market for social games will be better for some companies and not others?
Jens Begemann: We have this vision that by 2020, we want to make games into a medium that everybody uses. So today everybody listens to music, and everybody watches video, but games is something that only a fraction of the population enjoys. If I go out in the street and ask someone 'Do you play games?' they will say 'Well, no, but I used to when I was younger' or 'My kids play.' We want to change that. We want everybody to play games for twenty minutes a day, and we see tons and tons of growth opportunity. Because people now have more and more devices where they can play for just a few minutes, everywhere, while in a waiting queue, while watching TV with their family, while having a lunch break at work. For us I'm very optimistic and I see lots of growth ahead.
Q: Do you see any dark clouds on the horizon, obstacles that could get in your way of realizing this vision?
Jens Begemann: We see obstacles every day, and we have to remove these obstacles or jump over them. I don't see a thunderstorm approaching on the horizon.
Q: Right now you monetize your games by selling virtual goods. Some companies are experimenting with advertising; do you see that as an avenue for your company to increase your monetization?
Jens Begemann: We believe that games should be free and that it should be possible to play them for free because that just broadens the audience so much, and it takes away all of the entry barriers that you usually have. I'm a big believer in that model. Selling digital goods is a great model, to have a small percentage of your users pay for all of the development effort. Other things like advertising may add to that in the future. We don't do that today, because we are very focused on growing to new platforms, but sometime in the future that may be an interesting additional model to monetize those who don't actively play.
Q: Is your focus trying to build more games and trying to expand revenue that way, or to increase the very small percentage of people who actually pay for goods?
Jens Begemann: Our focus is mostly on creating great games and making the existing games better. Obviously what you get from that, by doing those two things, is you increase your audience and a higher percentage of people spends money. Therefore it's both, but we are very long-term oriented and not short-term revenue oriented. The revenue we make to today allows us to invest in creating many new games.
Q: Are you planning to go public at some point?
Jens Begemann: I hear other companies talking about that quite a bit, but we're very focused on growing Wooga and growing our games.