Xbox Live Arcade creator wants you to join his Sparcade

If you're reading this website, you no doubt are already familiar with Greg Canessa. The former PopCap vice president and Activision Blizzard mobile games head is probably best known for setting up the first console-based digital games ecosystem in Xbox Live Arcade, which became a $100 million business for Microsoft. Now, with GSN, Canessa is once again attempting to build out a vibrant ecosystem, but this time with a focus on competitive skill-based gaming.

Today Canessa is lifting the curtain on Sparcade, a platform concept that he specifically joined GSN to construct, he tells me.

"I've been here just over two years leading a team in secret working on this product. I came to GSN for this specific opportunity... It is nothing short of what I believe to be a transformative opportunity for mobile games. I really don't think that's an overstatement. I think we have an opportunity to introduce a new business model and a new monetization method in the app store that has not been done up to this point and also create an ecosystem for developers to monetize their apps and, frankly, a new way to delight the customer with a play pattern and a customer experience they haven't seen before," he begins.

Canessa believes now is the perfect time to launch a platform and app like Sparcade, because of the confluence of mobile gaming being huge, more casual players entering the industry and the rise of eSports. Sparcade will take some of the most well known franchises, like Tetris, Pac-Man and Scrabble (that basically everyone enjoys, whether casual or not) and leverage their audiences for skill-based competitive play.

"There's no reason why you couldn't take Sparcade and think of it in a broader context across a number of platforms in our industry"

"There are really three distinguishing factors. The first one is that it is a single business-to-consumer straight up app that you download for free from the App Store that has a variety of games embedded in the app, skill versions of the game, that you play for practice or for real money. The second distinguishing factor is we're leading with some of the biggest brands and franchises on mobile and just in games in general, [and] people know these games. They already think they might be good at it and so since they already feel like they're competent at the game they're probably more likely to be interested in playing competitively for free or for money," he explains.

"Third, and this is something I'm particularly passionate about, having been in mobile games for a while... What the best games do on mobile is they're social. So all of the most successful games you probably have in your pocket and I certainly have in my pocket are social games in some form or fashion. And one of the best things of aggregating this in a single destination app is we're able to wrap it in a full social layer and meta-game. That builds a community. It drives daily engagement and it builds a community around Sparcade. So as you'll see... you have a Sparcade identity, there will be events, tournaments, achievements, leaderboards, friends, challenges, other things that you can participate in that span all of the games contained within the app container to really build that community, that common community and hopefully it'll give you an opportunity to show off, show your stuff, feel like you're progressing your skillset and so forth... No one has really ever done a big brand, single destination platform wrapped in a social layer of meta-game. That's really what makes Sparcade different and stand out."

Importantly, Sparcade launches for mobile on iOS first, with Android to follow sometime after, but Canessa sees the platform as something that's entirely transferable to any system, whether PC or console. And as long as the users of the different devices have feature parity, they can play against each other (so iOS vs Android, for example). It's also worth noting that GSN is owned by Sony, and Canessa cited that backing as a huge help, so could there actually be some cross-pollination with the PlayStation ecosystem?

"I don't have anything to announce today with regards to what we will or won't do with our parent company or our console platform. I would just encourage you...to think about the fact that Sparcade is a vision and a concept and an idea, and that vision, concept, and idea can be applied to a wide variety of platforms. We are leading with mobile. That's what we're talking about today, but the concept of skill-based competitive participatory short play session games that you can play for free or for money is a concept that you can apply to a wide variety of games," he says. "There's no reason why you couldn't do this fundamentally. You change some things. You change the portfolio. You change some of the mechanics we built that are optimized for mobile. But there's no reason why you couldn't take Sparcade and think of it in a broader context across a number of platforms in our industry."

Another critical point for Canessa is that Sparcade truly is being built out as its own brand. He and GSN are fully aware of the stigma associated with social casino and bingo games. That's not what this endeavor is about, however, and Canessa is not afraid to distance himself from GSN when it comes to marketing Sparcade.

"We are building Sparcade out as a brand. You don't see the GSN logo in here. We are building Sparcade out into its own brand and its own identity"

"You're spotlighting something that is an issue for us and we are aware of that. Many game companies have different categories of entertainment. You have lots of companies - you have EA, you have Kabam, you have other companies that are out there that are participating in casual, that are participating in mid-core or hardcore. It is entirely possible. GSN is a Sony company. So the thing to keep in mind is this is a huge initiative. Not just for GSN Games, but for Sony, which is obviously one of the leaders in the business and participates in a wide variety of games. Hell, they have Wheel of Fortune and PlayStation in the same company. So we've participated in entertainment across game genres. We are building Sparcade out as a brand. You don't see the GSN logo in here. We are building Sparcade out into its own brand and its own identity," he explains.

"GSN is, frankly, lesser known... This is a completely different business from what GSN does. It needs to be different. It needs to be separated out. So our strategy is to pursue an independent brand identity as a platform and a service and an app while part of the GSN and Sony family at the same time."

While the challenge of building a brand-new ecosystem for Sparcade is similar to what Canessa faced with XBLA, the approach and ultimate goal is actually quite different. It's not about quantity with Sparcade, whereas with XBLA, amassing a portfolio of close to 1,000 games was a big deal. And while the early games on Sparcade do fit the casual mold, the platform isn't necessarily going to be a parade of casual titles. If a Vainglory-styled title came along and was a proper fit, Canessa would embrace the opportunity.

"If you go back and look at my history and what I've said over the years - what I've felt about XBLA, what I feel about this is you have to be clean and crisp when you're doing something like this about what your platform is and isn't. And it's not - I would not slice it as this is casual. We aren't only going to do casual games. This isn't casual gaming. I don't think that's the right way to look at it. It's about the experience, and whether or not that game meets the criteria for a successful skill game. Is it a short play session, is it a true game of skill where luck is not a determinant factor in the outcome of the game? Is it acceptable by a broad variety of people? Does it meet another number of criteria? That's the litmus test as to whether or not it fits on our platform," Canessa says.

"And the other thing I'll note for you on that point, which is an important one, is with this business, which is an asynchronous tournament platform, more games is not necessarily better. With XBLA, it was all about maximizing the number of titles, obviously, in a smart way. With curation, not having 15 crappy poker games, but growing it and growing it and growing it so that the library we ultimately achieved... was something to be proud [of]. With this, it's not that. It's an asynchronous tournament platform that's driven by liquidity and velocity. You have to have enough butts in seats, so to speak, to build tournaments to make it a compelling experience for people. So my strategy early on is not to go ahead and sign on anyone who wants to come in here if they're a good fit. It's to really curate the portfolio and focus the audience on several big titles that we feel like we can get behind and, frankly, can help Sparcade to reach its escape velocity as a platform. Once we have a few successful titles we can grow out, we have to be careful about how we grow out and how many titles we have on the platform. You don't want to split the audience too far."

With that in mind, it's entirely possible that Sparcade could host new indie titles in the future. The market needs to be educated first, however, Canessa notes.

"Any time you define a completely new customer value proposition, a new play pattern, and a new customer interaction model, there are various stages, right? You have to kind of educate the consumer on the need. There is unmet or latent market demand, but if you walked up to somebody in 2004, before we launched, XBLA, and said, 'Hey, do you want to play Bejeweled on your Xbox? People would be like, what? What? No...' It wasn't until we launched the platform and we grew the launch portfolio and... the role of curation was super important, right? We intentionally put a little bit of everything into that portfolio. We put a little bit of retro arcade. We put a little bit of casual PopCap-style game. We took some bets and some risks on some really innovative creative indie titles, with Geometry Wars, Marble Blast Ultra, etc. And in doing so, what we did is we simultaneously educated the market and educated the consumer on what it's like to download a game digitally onto the console and we also created an opportunity space for indie developers and smaller developers to actually break through the publisher model," he says.

"I'm proud of Castle Crashers and Limbo and Braid and Shadow Complex. Those are the type of titles that were created and fostered through the XBLA ecosystem we created. I want to do exactly the same thing here. This is just the beginning"

"Remember the whole console was locked into a publisher model before that. And in doing so, we spawned some of the most creative and innovative things in, I think - I'm biased - in the history of our industry through that process. And what our competitors did and so forth, it went far beyond XBLA. But what I'm most proud of from those games is not the fact that we did Gauntlet or the fact that we did Bejeweled on XBLA. I'm proud of Castle Crashers and Limbo and Braid and Shadow Complex. Those are the type of titles that were created and fostered through the Xbox Live Arcade ecosystem we created. I want to do exactly the same thing here. This is just the beginning."

Anyone who's followed the App Store, Google Play Store, or even Steam, understands that discoverability and monetization are big challenges for any developer to overcome. This is another facet of the business that Canessa believes Sparcade could help address. Any games in the Sparcade platform would, of course, get more notice than they would free-floating on the App Store, but more than that, Canessa sees certain genres benefitting in ways that they couldn't from traditional F2P.

"I think what it does is it provides for a more viable business model for the developers and obviously encourages those titles to make it over to the mobile platforms. It also helps that we can build and foster a community around some of these games that are having a hard time finding an audience and gaining critical mass of DAU to really take off and reach escape velocity," he says.

"So what we've seen in the last 24 to 36 months in our industry has been transformative. It's been really interesting and there have been winners and losers. There have been titles that have somehow made it into the zeitgeist and people are playing and they're organically or inorganically building a community and they're a thing. And now it's fanatical Twitch streaming, YouTubers, social media, in some cases eSports pickup and they end up being these huge phenomenons. There are a lot of other games in the app store that just don't have the traction, right? They need a booster, they need a leg up to aggregate a community around the competitive multiplayer nature of what it is they're doing. And this could be an opportunity for those apps," he continues. "Even popular franchises, like some of the ones that we have partnerships with, they have big communities - Tetris has got a massive community, Scrabble has got a large offline community, right? Scrabble's competitive scene with the physical board game is huge. But building communities around competitive video game versions of this... is an unmet market need and an opportunity for those franchises. So we think we can do that with a lot of games and a lot of partners."

With mobile being dominated by a handful of the same companies and top grossing charts remaining somewhat stagnant, Canessa sees "a lot of frustration expressed on the part of a lot of developers," and he thinks sticking with regular F2P models is contributing to the problem.

"We're thinking about building out this parallel ecosystem so that developers can embrace an alternative business model to free-to-play that may work better for their game genre"

"Free-to-play works better for some genres than for others. There are certain genres of games that free-to-play is very conducive to and there are tons of other totally awesome legit genres of games that we grew up with on console or PC that just aren't a good fit for free-to-play. And so there's this latent desire for an alternative monetization method, an alternative business model in our industry, to monetize some of those genres. And a lot of those are titles that also happen to be great skill games that we're going after. So puzzle games, card games, word games, infinite runners, retro arcade games, other things... come on, like, a $1.99 app, premium was tried, and it didn't really go anywhere. Ad support is still out there but it has a user experience issue. Really along the way we're thinking about building out this parallel ecosystem so that developers can embrace an alternative business model to free-to-play that may work better for their game genre," he adds.

As Canessa mentions, Sparcade does not require money to play. If you simply want to play for tokens, that's fine, but for the sake of including the widest possible audience, Canessa is starting most tournaments at just $1.00. And in a keen decision, there are no ads. "It's very important to me that we maintain the highest quality experience possible, at least initially when we're incubating the platform. And so it's no ads. I don't want to distract the user with ads, especially in the early stages of defining the platform where we're familiarizing customers with the model and building trust... So if you play for tokens or you play for cash, it's exactly the same experience," he explains.

In the long run, it's possible that Sparcade may support much higher stakes, but the entry fees in the beginning will probably max out around $5.00. Regardless of the money, it's the psychological impact that playing for cash has that makes it more exciting. "We want you to be able to play these and enjoy these and have fun and not stress out about it. But at the same time, we know through talking to consumers over the development process for this, it's actually not about winning money for people surprisingly enough. It's not about the jet ski they're going to go buy or the Rolex or whatever. It's about the fact that having a buck on the line just makes the game a little more fun and interesting," Canessa says.

Sparcade is in closed beta now and the consumer version will go live this fall. The platform's first games include Pac-Man, Scrabble, Tetris Burst and Solitaire TriPeaks, but Canessa says "we have a number of other unannounced IP partners and publishers that are lined up that will be adding their games to Sparcade in the coming months and years."