Caught in the Net

Few men can have more of an insight into what makes a successful casual gaming company than Paul Thelen. He's the founder and CEO of Big Fish Games, an online casual gaming publisher rated by Media Matrix as one of the ten fastest growing websites on the Internet and responsible for five of the top ten selling casual games of 2006.

With eight years of experience in the sector and having cut his teeth under the tutelage of Rob Glaser at RealArcade, Thelen has amassed a wealth of know-how that has allowed him to lead his company to impressive year on year gains.

"My philosophy on casual gaming is that people don't become casual gamers because of advertising or because they read an article," he explains.

"A typical casual gamer is an older female and to get them involved in casual games can be done in one of two ways. The first is by playing a game like Solitaire. After a while they tire of that and realise that a computer can be used for entertainment. Then they ask, 'What's next? Is there a better version of Solitaire or are there other, even better puzzle games out there?'"

"The other way is the thesis of the My Game Space initiative, which works by word of mouth. This works very well on the casual demographic. If a 55 year-old woman who only uses her computer for email sees an ad for a game, she's not going to become a gamer. But if she has a neighbour or a friend who's always playing a certain game, then she's going to get curious."

Over the past eight years, Thelen has seen the emergence and rapid growth of the casual gaming market, watching it flourish from small beginnings to an industry with over 100 million users.

With a dedicated team driving his company ever onward - both from a development standpoint and a partnership one (it now boasts over 400 global partners) - Big Fish has spread its distribution to a truly international scale, including Europe and Asia, while also porting many of its games to Mac format.

However, perhaps the most defining factor, which has set Big Fish apart from its competitors, is My Game Space - a service that provides a viable and vibrant environment for casual gamers to get together, converse and swap notes on their favourite games (itself a form of viral advertising).

"My Game Space was an initiative to give a voice to these casual gamers in a way that works for them," explains Thelen. "What they care about is communicating with their existing friends and sharing their passion for casual games. And that's the type of experience that we try to create on My Game Space.

"The casual gaming market is becoming increasingly about communities. While core gamers are very influenced by advertising, casual gamers are much more influenced by word of mouth."

Having worked closely with Rob Glaser at RealArcade during the early days of the casual gaming market, Thelen has witnessed firsthand which monetisation systems are the most effective and why.

"When we launched RealArcade eight years ago, the 60 minute trial didn't exist," says Thelen. "The US $19.99 price point didn't exist. Those price points weren't accidentally or randomly thrown out. We did a lot of basic price elasticity testing and tried to figure out the optimum price. We figured volume over price, so we went with US $19.99.

"For the one-hour price point, we tried everything from level limitation to level and time limitation, or playing for only five minutes but starting the game as often as you wanted. The one that worked universally was the 60 minute trial, which far outperformed the 30 or 90 minute trials. Everyone thinks that is arbitrary, but it's not. We really did study it very carefully.

"The subscription models are interesting. They work for a certain demographic. A lot of gamers in the casual market get very attached to their games and the idea that they're renting them is not attractive. Subscription is powerful for the younger audience.

"Advertising is emerging and I think that for community games that are supported by ads, this is a very viable model. I think advertising will play a bigger role than before, but I'm not sure right now what form that will take."

Thelen also believes that long term planning has played as much of role in the success of his company as My Game Space and the intelligent use of monetisation models, with Big Fish always looking several years into the future when it comes to business decisions.

"All of the decisions we make are based on a three to five year horizon," he explains.

"It's a philosophy that we use at Big Fish Games that has always served our customers well. It's a compound effect of retaining partners, employees and customers.

"If you don't lose your employees then you can build your company nicely. If you don't lose our customers, you have a nice compound growth. It's about a focus on the long term and the development of your intellectual property."

An increasing number of developers continue to join Big Fish's ever-expanding list of partners, due to its massive worldwide distribution network, another fundamental factor in the industry's continued growth.

The Diamond Games recently joined Big Fish's Principal Network Partner program and saw revenues increase tenfold. "Partnering with an industry leader like Big Fish Games has proven to be extremely lucrative for my business," explains TDG owner Mark Wegner. "The networking effect of this program has allowed my earnings to grow exponentially."

With Big Fish Games's results speaking for themselves, any emerging casual games developer or publisher may be well advised to heed Thelen's views on this rapidly growing industry.