PlayFirst's Mari Baker

Certainly, there's Zynga and then there's the next group, and then there's everybody else. So do independent developers have a chance? Well, in any entertainment space, innovation, any IP can all of sudden capture the innovation of people and zoom to the top. I think there's plenty of examples, whether it's in movies or TV or games where companies have spent tens of millions or hundreds of millions of dollars on DOING IT BIG. And it fails spectacularly. And yet you have a sleeper movie or an independent movie or TV show or game that zooms to the top. On Facebook we still see the ZipZapPlay guys, for example, with Baking Life, who came out of nowhere. I think ZipZapPlay are now the 25 Facebook developer – just a tiny little group. The Watercooler guys - who I guess are Kabam now – are another example. So I don't think you should ever write off an industry because some consolidation's happened at the top. I think if you did that Google might not exist, because Excite and Yahoo were already owning that market.

That's right. The interesting thing though, to do an MMO took a lot of capital. With Facebook games, you can still have five people self-funding for a while and all of a sudden [smacks hands together] figure out how to hit it big.

We're going to be cross-platform, and we think that's going to be consistent with how we hear consumers play. We bring consumers into the office on a regular basis and just listen to them talk about game playing. And they talk about playing on their iPhone when they're on their way to work in the morning, or just when they're bored. And it used to be that you might just gaze out the window or play a crossword puzzle or something, but now because the technology has enabled really good entertainment on such a small device... There's lot of times during the day where you have ten or fifteen minutes, which I think has created a whole new market.

Obviously an iPhone has email and pictures and a lot of things on it, but games are certainly the killer app on the iPhone. Consumers as I said talk about coming to work in the morning and firing up Facebook and having five or ten minutes of play - throughout the whole day. And there are also consumers for whom games are their preferred form of entertainment. So when they come home in the evening they want to engage immersively in a game, whether it's a World of Warcraft or a PC download game or an Xbox title, instead of turning on their TV. It's a shift, it's people who prefer to get their entertainment that way. So we think there's lots of opportunities. In fact, doing just Facebook and ignoring these others games doesn't leave you very well positioned for the eventual merging of social and mobile kinds of gameplay. So we're pursuing all three; we have some experiments going on still in some other areas including some on future phones and what not.

We're big believers in virtual goods and microtransactions. There are so many free to play models out there, whether in traditional PC download where the model was try it for 60 minutes and then buy. I don't know who came up with that, but for a lot of people 60 minutes is enough. And so the appealing piece of the virtual goods model is you can still tap into a large audience via a free to play entry, you don't have to spend any money. The Facebook data would tend to indicate the same kinds of conversion rate as on the PC download model, but the difference is that for some people you may only be getting 3 or 4 dollars, but for other people you're getting 20 to 30 to 40 dollars or more. And thus your revenue per user is actually higher than a pay-to-buy-the-game model. So Facebook obviously we're doing that, and our new version of Diner Dash on iPhone you have the option to buy more levels. We'll be continuing to work more virtual goods and microtransactions into our iPhone games.

Yeah, the Google acquisitions and Google's entry is interesting. It adds more legitimacy to the space. It'll still be interesting how it unfolds. We have a version of Diner Dash on the Android, which as far as units go does fairly well, but... I don't hear from a lot of game developers who have successful revenue models on the Android. In the end, if developers can't afford to sustain having businesses and reinvesting in improving quality, you can't create a very robust ecosystem. I think Apple's done a very nice job on the iPhone, taking 30 per cent and leaving 70 per cent for the developer. It's a good model.