Miniclip.com was founded in 2001 by two friends with a vision of doing something with flash online, but no clear vision of exactly what. Until they struck success with an interactive flash video of a dancing George Bush.
Nine years later and the site is attracting user numbers of 57 million a month, and has a worldwide network of over 300 flash developers creating content for a wide range of geographical markets. GamesIndustry.biz spoke to the company's co-founder and CEO Rob Small about how it has achieved such success, how it continues to attract new users and what he thinks of competitors such as Zynga.
Q: Could you tell us about Miniclip - how it began and where the business is today?
Rob Small: I set the business up in 2001. I'd just left university - I'd done a degree in tourism management, so totally unrelated to what I do nowadays. But I met Tihan Presbie who's my co-founder. He was a trader in the money market in the US, had done quite well for himself but was interested in climbing over the fence and no longer investing in successful companies but really wanting to establish one himself. He'd seen the growth in a lot of the internet stocks and I was looking for something to get my teeth into, so it was good timing. We got together with the ambition of setting something up online, although at that stage it wasn't exactly clear what that was going to be.
We were fortunate that we discovered early on macromedia flash, which of course we know nowadays as being a very big and successful software used for entertainment, but back then it was in its infancy and not really being used by very many sites. But we backed that horse - we thought it was going to be a crucial technology. Tihan came up with the idea of doing a dancing George Bush animation. He pulled a few dance moves in his kitchen and I filmed it and animated it into a little interactive movie clip.
We really had no idea has this was going to perform. We just pushed it out and sat back and for the first couple of weeks nothing really happened. Then I remember I got a call one Saturday afternoon from the tech company we were using for our hosting who informed me that our servers had gone offline due to the amount of traffic they'd received. It had got picked up by someone in the US and had gone like a viral rocket. We got calls from news and TV networks who, I guess, had never really seen anything like this before.
I think even now it could be one of the most widely played viral releases on the web ever. We estimate it's been played over 300 million times. But we needed content that would keep visitors on the site for longer, so we started sourcing more mainstream games, we started building games ourselves and hired a few people.
We're very pleased that we had, I guess, quite a first-of-its-kind and unusual business model and were able to start monetising through advertising while giving away our product for free. And there weren't many businesses back then doing that. Most operating then were the big MTVs and Disneys who were re-purposing a lot of their old content. I don't think they understood what the web was going to be or how to tackle it.
Fast forward nine years and we've got 100 people working for the company, we've been profitable for eight of our nine years, we've got 550 games on the website of all different genres and 57 million unique users every month spread very far and wide.
Q: And from the start you've always allowed other sites to embed your games as opposed to trying to drive all the traffic to one place, is that right?
Rob Small: You're right. We were fortunate that we had that stroke of genius. Sites were desperate to hold onto all of their stuff. If you were Viacom and you had made a music video, why would you want anyone to be able to publish it except you on your official website? They were also going through the nightmarish problem of all of the issues around piracy of music online. So that kind of reinforced their stance - they all sort of pulled back immediately from any way of wanting to share their content online. We thought that, at the end of the day, it's intrinsically in the make up of a lot of these young people that they can access stuff readily and freely. And whether or not you choose to make it accessible, they will get their hands on it. So we embraced that and thought, well let's just package up the games so they've got branding in place to drive users to our site then just let people come and take them.
And what's happened, I guess because we were one of the first in this space, is that a lot of the companies that come in - a lot of the copycat businesses - and created the million and one flash games sites that are out there, often feature Miniclip games on them. So the success of those sites, in a way, helps benefit us and grow our popularity in the market as well. Had we not done that then I think we would have been forced to compete more directly against some of these up-and-coming casual games businesses who wouldn't be using our content and helping us to grow our audience. They need games, they're generally set up initially by hobbyists who are in exactly the same position as we were, and it's a no-brainer for them to take some of our games for free and publish them on their own site. We cover the hosting of the games too, and now provide high scores in them, so it's pretty much zero risk for them.
Q: It seems that a lot of the social networking sites - Facebook and Hi5 for instance - have really only just realised just how popular games are and how they can be used to monetise users. What do you think of their moves into the gaming space?
Rob Small: I saw Alex St John's comments on that. He was saying that Facebook really had no idea that games were going to be as successful as they were - it just got dropped into their lap off the success of one or two titles... And yes, clearly we see the success of Facebook and we can all learn from that. I see it as being a slightly different angle from what we're trying to do. Our focus is on building a single destination site that is the number one place to go and play casual games. The social games on Facebook are more about cooperating with groups of friends and are slightly more simplistic in most cases, like Mafia Wars.
Also there's a lot of issues around the age problems with Facebook and youngsters lying about their ages to get onto the site and create accounts. And the security issues surrounding that. I think we can learn from that and certainly if you look at Miniclip we are embracing to some degree those social aspects - multiplayer gaming, challenging friends, we've got a cool new feature that allows kids, and anyone else who plays, to create a little league of their friends for every game that they play in. They can create a little physical representation of themselves that we call a YoMe and then compete head-to-head. These are the kinds of things that are driving usage on the social networks and things that we can learn from and benefit from on our own site as well.
Q: Do you know what sort of percentage of Miniclip users fall into the under 14s category?
Rob Small: It's a reasonably high number. I don't know off the top of my head, but because of the success we've had with things like Club Penguin, we've obviously driven quite a deep connection with that demographic. And that's been deliberately from our perspective because that's been a very elusive demographic that people like Disney and Time Warner used to have watching their cartoons on TV, but who now are spending much of their time online and who advertisers see to being a very valuable demographic.
So we want to make sure that we capture that audience. But with the success that we've had, and the number and breadth of the games we've built, we obviously have users in other demograpics that enjoy playing perhaps some of the more mainstream games that appeal to say the housewife demographic - the puzzle games, hidden object games, sudoku, those types of titles.
But part of the reason that Miniclip has grown to 57 million users without spending one pound on advertising, ever, is because we have been able to capture that demographic and they're so chatty. They're in the playground and they're talking about the games they're playing. You seed an idea with one of them and, before you know it, every friend is playing the same game. It's a really powerful group to connect with, and advertisers know that we haven't spent money on advertising and therefore we can do for them what we've done with our own brand.
Q: Are they also valuable because they could turn out to be your most loyal users in the long term? Some of your younger players presumably may never have played a console game and might well always seek their gaming entertainment online. Whereas myself, and probably many of my generation, will always instinctively link 'proper' gaming with consoles and joypads...
Rob Small: Yes, well that's what we're seeing. We're seeing the demographic mix extending because, as you say, a lot of those initial successes that we had were nine years ago now and those guys are probably at university. But when we speak to our audience and get feedback from them we see that they're university students playing all the new games and all the old favourites they used to love.
We can't compete against consoles clearly on quality. But we can compete on the fact that our games are predominantly free. And that they're very successful from any device that you might choose to access them - we now support iPhone, we're just about to release games on the DS and the Nintendo Wii, we showcased in the keynote that Eric Schmidt did for the new Google Nexus phone because our games play in the browser on that phone.
So we believe that by having our content available through the browser, however things might move in the future, we will continue to be able to reach the audience. I think the concern when you're going down the console road is that things move so quickly in that market it's very easy to get left behind, and although you might have an intensive period of success for a year or so, it's very difficult to build a very long pipeline of successful titles. You can see that by the bumpy road a lot of the older development studios have had in recent times. Even having something like a Tomb Raider under your belt doesn't guarantee you're going to be successful forever and a day.
Q: So you're exploring quite a few of the portable platforms. How will you be making your games available?
Rob Small: We can very clearly track through all of the analytics that we have to see the games that are most successful on our site. And although initially we may give those games away for free, we believe that there's an appetite for users to play those games on other platforms.
We have a very successful franchise we've developed called Monster Truck Nitro, which was originally something we came up with as a fun and action packed flash game. But over time we've built an iPhone game that's been hugely successful and was used by Apple in the global TV commercial for the 3GS. We're just about to relaunch that. We also created a PC download version of that game that people can buy which has a much richer experience in it. So we're creating this franchise concept where we will test the concept with the audience and if we get the sort of interest and involvement from them we can grow it into this cross platform franchise.
That's really what we're looking to do and it means we can capitalise on those games that have a very big audience and build them into something much bigger.
Q: With your online site, I guess the issue of security is less of a concern than it is for the social sites. But it must still be important to keep content suitable for young players, so their parents can feel happy letting their kids explore the site?
Rob Small: It's something we were very keen to ensure, even way back we knew that if we were going to attract high calibre advertisers - the Sonys and Disneys and Time Warners - we would need to ensure that we maintained a high quality bar and didn't try the get-rich-quick approach that some of the flash game sites do - creating things that are topical, then are somewhat unsavoury in their content.
We also didn't want to compromise on security and safety of the users - so we do have pretty stringent things in place to ensure that it is a safe place and high quality place for users to spend time. And something we're looking to get into even more is the learning and educational stuff. We see that parents not only see Miniclip as a fun place to spend their leisure time as a reward for doing homework and so on, but also it could be a learning experience for them and there's an opportunity there for us to capitalise on some of the successes we've seen on things like the Nintendo DS - building a casual experience that teaches kids valuable things like how to spell and how to type and maths and geography skills in a site that they really enjoy visiting.
Q: You mentioned the quality of your games. You obviously think that it's important to keep the quality bar high, and to approve the games that are released onto Miniclip?
Rob Small: Yes, we've built a set of different tools so that the developer network - which is about 300 individuals and companies that work for us developing content - are able to use those different APIs and different assets that we create within their games.
So each game, although it may not be an exact look and feel copy of a previous game, it has that Miniclip feel about it, it has our logo and same high scores component, the same awards. We wanted to create that continuity of quality across the titles. We want people to look at a game and say, "yes, that's a Miniclip game".
Q: There's obviously two ways of approaching it - having a more closed platform, or an open one where users rate the best content. You've clearly decided the former was the best bet?
Rob Small: We wanted to build up a brand name that people would trust and know it was a place they could get a high quality experience.
There are two ways you can go about it - you can let the audience rank what is going to be popular, and certainly in Facebook that happens. Or you can take a more editorial approach. And while we consult with our audience - a lot of them are testing our games in beta - we reserve that editorial control. The reason being that if you rely entirely on what the audience likes then you end up with most of the content on the site staying the same, which is why Mafia Wars is still the number one game, along with Zynga Poker, and those games are very difficult for anyone to ever topple because they've got such a head start and such a large audience behind them.
I think it's natural on a site that is social or community-based that the audience makes that decision. But I do think that, for us, with the understanding we have of our audience, that we're able to make those selections and set a kind of filter in place to make sure the stuff they're seeing is good enough quality.
You look at YouTube and you see this ridiculous amount of content they've got available on there, but it's very difficult for people to find the good stuff, it's so vast. And there is a limited amount of shelf space on their homepage for them to be able to display the stuff that's popular. You have more shelf space online, but I think the audience likes to have some sort of suggestion at least given to them of what they might enjoy, and that's something we tried to do.
Q: At GDC this year, there were some criticisms of Zynga that it puts out average games which spam users. Do you think those types of games damage the overall flash and social gaming market, or are users becoming savvy enough to distinguish between the good games and sites and the bad ones?
Rob Small: I think users are pretty savvy but I think that what goes around comes around and that if you want to create a business that's going to be around for a long time and be successful then you need to think about how you're going to connect with your audience and spamming them is not something we'd contemplate doing. It's something that would tend to lean towards a very intensive period of success perhaps but that might end up with some fairly serious issues.
You look at the problems [Zynga] have had around their offer-based business model which have been fairly unsavoury. Certainly companies that are well-known for using rather underhand techniques for acquiring users, using mechanisms like that is a way to make, clearly, some pretty large amounts of money over a short period of time. But I wonder if they're going to be around in five years time and continue to be as successful.
Q: Do you think many people are playing Miniclip games through console browsers? Are people playing these sorts of games using their Wii for instance?
Rob Small: I think there's this move to online play. I play as many console games as the next man, and if you come to the Miniclip offices you'll see we've got a whole array of different consoles here that we use for 'research'.
It's a lot of fun and I enjoy the whole online experience now, with games like Call of Duty the longevity of the gameplay you get playing online against other users in a million times what a single player game could ever offer you. And that's why a lot of the games we're developing now are free flash multiplayer games, because we know as well as they do that by having a different human opponent every time you play it's going to give you a different experience.
Our games are playable in the browser on the Wii. We have a site that runs on iPhone and, as I say, the Google Nexus. Both of those have had a few hundred thousand views, which on something like the Nexus, which is a new phone, makes us think there is this demand for people to move towards accessing this content online.
That's not going to happen on the iPhone because the success of the App Store means that it's a bit of a walled garden. The convenience of having a payment method already set up and being able to do very low cost transactions is a fantastic business model. It's something we really want to be a part of, but I still think that there's an appetite for users to access the content online - there's just more flexibility in that experience I think than being forced to go and buy a title and have that typical CD or cartridge or whatever it is that you need to carry around.
Q: You sound like you hold the view that online social games will more co-exist alongside the console experience rather than take over from it entirely in the near future?
Rob Small: Yeah, I think so. I see them as two totally separate business models and I don't see that there's any kind of crossover. You have to look at the fact that Zynga has the same investors as Facebook and they're kind of the same company therefore. I believe it would be very difficult for someone to topple them from the success that they've already had.
Underneath them, there's always a changing mix of who's popular month on month, that's something we see, so I think it's going to be very difficult for people to maintain the successes that they've had.
It's also very expensive and time-consuming to build a lot of these very successful social games. And although some of the numbers people throw out seem fairly low, I think in reality the continued development that needs to go on to ensure the audience continues to play is significantly more than perhaps they might let on.
Rob Small is the CEO of Miniclip.com. Interview by Kath Brice.