Mobile Army

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.

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.