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THQ's online boss Mike Hogan

On social games, online strategies, the problems with Facebook and the Joyent deal

GamesIndustry.biz How much room is left at the inn? Are you confident you can compete with the Big Three, especially now the age of viral growth seems to be over?
Mike Hogan

It is a little bit more of a challenge. But again there are tools that work, obviously marketing becomes a lot more important than just expecting people to tell their friends or see it on the Wall, that sort of thing. If you take a look at what's happening right now, it's switching less from being viral and more to being marketing-dependent. It'll end up being a mix of that of that as we go forwards, but doing what worked a year ago isn't going to work now. We're aware of that and we're putting that into our plans for moving forward.

There's a couple of reasons why you might do a Facebook game, and one is to have it stand alone and be profitable and generate revenue, and another one is to have it complement a game that's already out there. So a Facebook game could easily be just a marketing tool as well. Quite likely it's going to be some combination of revenue producing venture and something's that going to try to build brand awareness and bring people into - I'll say the core game, but maybe the main game is the better way to put it. It doesn't necessarily have to be about how much money you can make from our social game, in some ways it's actually part of the marketing effort for something else.

GamesIndustry.biz What business models are you looking at, especially if some of these games are intended to promote other titles? How important are Facebook Credits to your plans?
Mike Hogan

With any game you have to build enough volume before Facebook will even really talk to you about using their credits. I heard yesterday that the number was 10 million MUA; I'm not sure that's the exact number, but there is a threshold you have to be at least reasonably successful before it's worth their effort to integrate and that sort of thing. You start out using your own currency, microtransactions, that sort of thing, then when it becomes a real project as far as Facebook is concerned, then you look at integrating their credits.

So as far as Facebook Credits are concerned, they're real, they're out there, people are using them it'd foolish to not at least consider using them. But I don't think it's the only way. It's really just a form of payment, right, so you have to get people off their walls, and the ability to use credit cards and things, and offer to the consumer multiple payment methods so that it's easy for them to spend money. And Facebook Credits is just one way of doing that.

GamesIndustry.biz How much will the Joyent partnership help to get Facebook's attention?
Mike Hogan

Everything that we can do to spend more effort and polish on the game makes the game a better game, and it makes the audience a larger audience. Certainly Joyent are helping us focus on not having to worry about where are we going to host the servers and how are we going to do server administration, and what about bandwidth... Solving the problem once and presenting that to the developer it takes a lot of stress off them. Maybe it cuts a head or two off each developer that we work with, not having to deal with that – and we take that and fold it back into the game. So it absolutely will make a difference. Instead of spinning the wheel every time we make a game, we just solve the problem once, and that has to impact the quality.

GamesIndustry.biz How rigid is Joyent's tech – is there any risk of limiting what you can do?
Mike Hogan

I don't see that at all. I believe if you tried to build something yourself from scratch, you could never come up with the quality and the feature set that the Joyent platform provides. So when I look at the tools that they bring to the table and the ease of expansion, the ability for us to scale quickly... And unfortunately the flipside of that is you have to be able to downscale quickly as well. I honestly can't see any constraints or anything that's limiting us to go any particular direction.

GamesIndustry.biz How wide-ranging is this partnership?
Mike Hogan

We're looking at Joyent as being the solution for all of our social games. The size of the deal, it really depends on how big the games are. So if we have a couple of small games then it's a smaller deal, but because we can scale quickly, because I'm not going to have to find another solution once we get past a certain growth point, there are solutions. Hopefully we'll be successful, and they'll be successful, and we come back later and tell you how wildly successful you are.

GamesIndustry.biz As a company, how much emphasis are you planning to put on social games? Will it replace efforts in core and family titles to any extent?
Mike Hogan

Social games is a part of our overall online strategy. There are other bits and pieces of online strategy – you know we'll be launching Company of Heroes Online soon, we've got [Warhammer 40,000] Dark Millennium online in development. We're doing social games, we're doing other, smaller online initiatives. You certainly don't want to put all your eggs in one basket and you hope that when you roll out franchises across the two platforms that they complement each other. So I would say the social games is important, it's part of our strategy – it's just not our entire strategy.

GamesIndustry.biz Have you talked to Google at all? The burning question of the moment seems to be whether they can beat Facebook, so if they're chatting to guys like you the odds of that increase...
Mike Hogan

I don't know that that's a question we want to answer at this particular point in time. It's a good question, but... [laughs] We're going to decline on that one.

GamesIndustry.biz Fair enough. How do you see social games in general evolving now we're past the initial surge?
Mike Hogan

We talked a little bit about the virality of it earlier, and it not being quite as viral. It's really because of the changes that Facebook has made to limit that particular feature. So when I talk to other developers in companies out there, they're all looking at standalone games as well as social games. If you're going to spend money marketing a game, marketing is now the big driver to success. I don't know that you really want to spend it marketing on Facebook, because then you're really just building Facebook. It seems like another way of looking at it would be to have these games that aren't necessarily tied to Facebook, or maybe they use Facebook Connect instead or something like that. Then the marketing dollar that you spend, you can actually use to build your own business and not somebody else's.

Mike Hogan is vice president of Online Publishing and Operations at THQ, and Adrian Ludwig is Joyent's VP of Marketing. Interview by Alec Meer.

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Alec Meer: A 10-year veteran of scribbling about video games, Alec primarily writes for Rock, Paper, Shotgun, but given any opportunity he will escape his keyboard and mouse ghetto to write about any and all formats.
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