Digital Chocolate's Trip Hawkins

The CEO on Apple, Nintendo and why free-to-play will always win out

There are few names more synonymous with the evolution of gaming than that of Trip Hawkins - the man who founded EA, nearly broke himself on the wheel of 3DO and pre-empted the huge market shift to casual with the launch of his current enterprise Digital Chocolate.

He's a man who splits opinion with almost every sentence, but he's also proven time and again that ignoring his advice is something done at your peril. Here, Hawkins speaks to at last month's Gamelab event in Barcelona, discussing App Store curation, where to hunt for whales and why not everyone wants to be a pilot.

Q:Last time we saw you speak was in the Social Developers Rant Back session at GDC earlier this year. One of your main thrusts in that presentation was that Apple needed to start curating the App Store more stringently in order to maintain levels of quality. There seemed to be something of a move towards that goal with the rejigging of the ranking algorithms - is that the right idea?

Trip Hawkins:I think that the idea of controlling the content, that idea seems to fit a company like Nintendo pretty well. Nintendo, for example, if they make a product like Nintendo DS where they're targeting children of a certain age range, maybe over the life of that product there'll be 100-200 products which really target that platform and customer base.

It kind of makes sense to have it really organised and really controlled. In most other cases it makes sense to have a completely open market and to have free speech - to really not interfere with it.

The world wide web is another example where there's a tremendous amount of content out there because it's open. Good luck to anyone who tries to control that. It's true about the written word, it's true about music. The guys who invented some of the music platforms... If you look at MP3, at Redbook audio on CD, even LPs before that. Generally the music industry gave the platforms to the industry and let everyone support them.

If you're a pressing plant and you press a CD, you have to pay a licence fee that goes back to the consortium who hold all the patents to do with the disc. You'll maybe have to pay a penny or two - it's no big deal. It's no like you're paying 10. So when someone comes along with a licence agreement and says you're going to pay 10 and we're going to control everything, it really doesn't turn out to be better for everybody.

It turns out to be better for the guy who pulls it off, but nobody else. I think we're getting to the point now where there's this enormous new game audience, and if you're only dealing with niche markets, if the Nintendo DS is only targeting this group, or for that matter a really high-performance PlayStation 4 would be targeting a niche group that really cares about high performance.

I should have said this in my talk. There are a certain amount of people who want to know how to fly an airplane. Some of them will even own an airplane. Then there's the rest of us. We just want the convenience of travel - let someone else do the flying for God's sake. Sometimes we want the Peter Pan fantasy - keep it simple so we don't have to know too much about how to do it, but give us the thrill of flying.

I think that's how we view media. You want to read a story? You want to read a great book that's going to make you feel all kinds of wonderful things because the writer is a really gifted story-teller. That's how you want to feel when you go see a movie. How you want to feel when you play a game.

The thing about good game design is that it's interactive. It's much more demanding, like flying an airplane. So there are some players who want the challenge of being thrown in the deep end of the pool to see if they can swim, and hey! Throw a shark in! Let me show you I can handle a shark. But the rest of the public is going - you're kidding me, there's a shark in there?

I don't care what category it is, any segment of the games industry on any platform - if you make it free-to-play with virtual goods it'll be better, financially.

Everybody likes to play. There's so much more potential for these vast audiences. So much more potential for value to the public if it's open. Apple has already managed to track so many applications, I think it's beyond reason to try and control it. There's too much stuff there.

Even though they've tried to control it, they still have thousands of farting applications on there. The single most important application that they have is Facebook, and it's very badly broken. It cannot call the application's API from Facebook. People touch that all the time, even by accident, and it hangs the application.

How's it working if you have thousands of farting applications and you end up with your most important application hanging your phone all the time? Is that what you really want? It's almost an impossible problem. That's why Facebook said, okay, we're going to go to HTML5 and make sure that our stuff works.

Q:Someone else who talked about the need for curation to improve standards was Chair Entertainment. They've just launched Infinity Blade in Asia as a free-to-play game. Previously they'd seemed like they were making a stand for high-price games on iOS - is this a climbing down?

Trip Hawkins:Well, I don't care what category it is, any segment of the games industry on any platform - if you make it free-to-play with virtual goods it'll be better, financially. You'll get more people to try it, you'll get more revenue from more customers, in the end.

I know in the MMO market this is where it's most difficult for them to believe in it. There are so many customers - the personality of many hardcore gamers is that they want to feel better about themselves because they're dominant in the game. They're willing to put in hours and hours and hours to create a level 65 character in LOTRO and then they get mad as heck when LOTRO decides to go free-to-play and let people buy virtual goods. That drives them crazy, right?

It's the same with Warcraft. Warcraft listened to their core customers for years saying, don't allow people to trade stuff. You might remember, there was a company based in LA, created by a game named Brock somebody. (Brock Pierce, founder of the successful but ill-fated IGE.) He was actually a child actor. He started the first marketplace where a WOW customer could trade their position and turn it into money.

So this was very upsetting to Blizzard because they had customers saying, hey wait a minute - you can't let these guys buy their way in! But very quickly this company had over $100 million in revenue. Just from helping people trade.

But they had a lot of accounts in the inventory. So Blizzard come in and say - wait a minute, this company owns these accounts, not an individual. So they just go boom, boom, boom and start killing the inventory. So they had to abandon that. Then they moved it offshore so it was based in the Phillipines and had to work more like real estate agent.

So a real estate agent never really owns your home. Someone wants to sell it - they arrange it and take a fee. Then of course eventually Warcraft had to give in and say, okay, we need to do this ourselves. So eventually that's the way it's going to go.

And yeah, there'll be a small number of customers who'll fight against it, kicking and screaming because it takes away an advantage they have - they can put more time in. They're still going to put the time in. They're still going to play the game better than anybody else and they'll put some money in to make sure they're better.

Q:That model is something we've heard a lot this week: the idea of 'whales' who will pay to become the best at a game. That seems to fit more closely with the idea of a traditional core gamer, a young male, than it might for what's seen as the casual market demographic...

Trip Hawkins:You would think so - but actually, on Facebook we can connect every user with a photo, name and location. There are whales of every size shape and colour all over the world.

Clearly there are different types of people who can decide that they care enough to become whales. There are women, young customers, old customers, Asian customers. One of the complaints is often, oh, we're in this third world country, there's no money here - but then you find that there are whales. They're everywhere.

I remember when Diner Dash first came out, I thought it was stupid. Thinking - women are always complaining about doing these demeaning household chores, and here's a game where you do more demeaning household chores. You don't get to be the hero, you're just serving food. I want the hero's journey, I don't want to just serve food. So I didn't get it. Didn't get it at all.

I think now over 200 million people have played that game. They've built a whole industry, really, from that type of game. So I think we're recognising that there's more to gaming than we can imagine. There's definitely a way to appeal to women, a way to appeal to children, every different culture.

But I agree with you about the way it is right now. The western, male, competitive gamer - that's the most obvious market to focus on because we know there's a lot of them, they have a lot of money and they're competitive. Competition is a beautiful thing.

Q:It does seem to work. You actually said in the Q&A at the end of your speech that competitive gaming is where the money's at, because people will always pay to be better than each other...

Trip Hawkins:You have to be careful with that. If you and I are friends on Facebook and you have a game where you spend weeks building a base and I come in and I blow it up - you're not going to play it anymore. You have to control exactly how much damage I can do to you, how quickly you can build it back up.

There's all that personalisation, I sort of get emotionally attached to what I'm creating - you don't want to see that all blown up every time I turn around.

Q:You talked a lot today about the way in which the browser can democratise gaming by moving power away from publishers. Do you not see Facebook, Bigpoint etc - the big portals and networks, becoming those new behemoths?

Trip Hawkins:This is where you have to look at two different internet strategies. Say you and I have two different companies. We can say, okay - traffic is going to come into my site and I'm going to be pre-occupied with keeping players on my site and not allowing them to redirect anywhere else. I think we both know that there are plenty of websites that try to do that, in different media categories.

Google's big agenda is the browser, that's where they make most of their money. The Android market is really a device to reduce Apple's market share.

I think that's an obsolete way of thinking. I think that's not a very practical way of thinking, because that customer's going to leave anyway. If the way that customer leaves is by clicking on your site, and then you owe me a click...

Q:The Applifier model?

Trip Hawkins:Exactly. We support that. We know that it works because we do it, but there are a lot of companies that don't like it. They think, I don't want to help my competitors.

But you'll notice that when you go to buy a car, all the dealers are in one area, because they've realised that it makes it easier for people to buy a car, so they sell more cars. It's not everybody's instinct to realise that it should work that way.

If you think, okay, here's a gamesite where they have traffic and I can get my game discovery there, but the game has to be there and it's according to their rules. I think there's another way to approach it - to say, I've got traffic, you've got traffic, let's trade traffic. Let's not try to control the customer when he's on our site. Let's recognise it in the browser.

Customers are coming and going. They'll come back if your product is good. If you have conviction that you can make a good game and have some faith that they'll come back, you can work with people who think the same way.

If the only way to get traffic is to go and sit on somebody else's portal, then by definition the big portals end up winning. That's catering to distribution thinking. But in the browser you don't have to do that.

So if enough developers recognise that - they can all collaborate and help each other and collectively have the power of one of the big guys.

Q:That Applifier model is amazing, not least because of how moral and democratic it is. When I spoke to them at Nordic Game, Tuomas Rinta was saying that they're looking to escape Facebook because they're over-reliant on it.

Trip Hawkins:To be honest they should. But here's the interesting thing. We think of Facebook and Google as being closed platforms like Apple, but they're really not. Google's big agenda is the browser, that's where they make most of their money. The Android market is really a device to reduce Apple's market share.

What Google really cares about is having a good browser on more devices. Similarly, Facebook's agenda is really the open graph.

So, if you have some other games and they don't comply with Facebook policy - that's ok. They can live outside Facebook, you can buy a Facebook connect. You can still get traffic from Facebook, you can still send things to Facebook newsfeeds that comply with Facebook rules and yet you're independent. That's where Applifier and some others are likely to go.

In a way Facebook's happy with that because they want thousands and thousand of other sites using Facebook Connect because they'll attract users to the site that are not yet Facebook members. Some will become members. The big financial opportunity for Facebook, they think, is that if they keep clean then they'll maintain control over the social network. If they then get the universal login as such that all these other sites have you logged in automatically, then they'll take over the long tail of the internet and then they can run an ad network through it.

That's a more powerful ad network than Google has because Facebook knows more about you than Google does. They can do better ad targeting at higher fees. That's a very powerful thing.

Related stories

Ubisoft buys Digital Chocolate Barcelona

Ubisoft confirms acquisition of 47-strong team

By Matthew Handrahan

Selling Your Children: Game Entrepreneurs On Letting Go

Trip Hawkins, Alex Seropian, and Tony Goodman on regrets, emotional trauma, and what drives them to keep starting new companies

By Brendan Sinclair

Latest comments

Sign in to contribute

Need an account? Register now.