Once upon a time, there was a brick of a phone made by Nokia that came preloaded with a game called Snake. The objective was simple: eat more and more dots without running into yourself as you grow. This game seems so long ago that it’s difficult to fathom that such a simple concept could pioneer a multi-billion dollar mobile gaming industry. Not two decades after Snake, a man named Luke Hsu sits down to log into his computer and as he does so, one cannot help but notice that he types not by touch, but with his two index fingers. Thinking about it, though, it makes sense. As General Manager of gameape.tw, a website dedicated to mobile gaming, he probably does most of his typing on a touch screen these days. He wouldn’t be the only one. With companies like Zynga and Rovio taking the world by storm with addictive, mobile, and social games – and experiencing brisk business doing so – people and their touch screens have moved gaming into new territory.
In our continuing coverage of companies that presented at last week’s appWorks Demo Day, Hsu sits down with us for a chat. During our discussion, he’ll talk about the evolution of gaming into mobile, how it’s making money, differences in East vs. West, and the issues with iTunes. Get your fingers ready.
Insight 1: Mobile Replacing Consoles As a Logical Evolution in Gaming
The CEO of Rovio, the company behind the mobile blockbuster Angry Birds, declared that console gaming was out. With expensive and relatively static games, he predicted they would lose out to a more innovative class of mobile games. Asked whether he believes this to be true, Hsu replies “my senior editor told me he hasn’t turned on his consoles in 6 months. Go on [Taipei’s metro system] the MRT. Do you see anyone playing PSPs anymore?” I can’t help but agree with the anecdotal evidence. The Nintendo DS and PSP that used to be in children’s hands during our family dinners have been replaced by a variety of Apple products.
Hsu begins an allegory: “Consider the RPG in its earliest format.” The earliest Role Playing Games were played with dice on a board, esoteric pastimes accessible to a slim band of society. The format was later ported to videogame form, and became slightly more accessible; playable, he says, “for the rest of us.” That format then expanded to MMO (massively multiplayer online) RPGs, and games like World of Warcraft subsequently created global links and attracted throngs of people who would never lay hands on a D&D die. “For the rest of us,” he reiterates. The format proceeded to mobile, where a player can casually dabble in countless RPGs available, removed from any stigma that may have once surrounded the genre. He arrives at his main point: through this evolution, gaming continually attracts more segments of society and is truly becoming ‘for the rest of us’. Through this evolution, a generation of console gamers is graduating to mobile, without a new class of console gamers to fill the ranks, as even toddlers embrace the mobile format in droves. “The death of the console is inevitable,” he concludes simply.
Insight 2: The Importance of a Wise Payment Structure in a Game’s Success
Luke pulls up a table on his website with three columns, the top 10 games requiring payment, the top 10 free games, and the top 10 top grossing games in Taiwan. He points out that the only games that are on both the ‘requiring payment’ and ‘top grossing’ lists are Angry Birds and Zenonia 3. It’s not because the top grossing games simply cost more to download. Rather, it’s because of the high amount of in-game purchases its players make. This is an extremely important consideration for developers: do you aim to make money from downloads, or make a free game good enough that users are willing to pay for more content?
Only 4 of the 10 top grossing games in Taiwan are not free to download
Hsu is a fan of the in-game purchase model, something that is backed up by the data. Of the top ten grossing games in Taiwan, six of them are free. “A user is more willing to try a free game. If they like it, they’ll perhaps make some purchases. The developers still make money, probably much more than $.99.” By his estimation, the in-game payment itself is an Eastern innovation. Introduced by Asian MMORPGs as a method to make subscription prices cheaper, it is a model that has seen great success in mobile gaming as well. “The trick is finding the balance between download price and in-game purchase price for your market.”
Insight 3: East vs. West, Willingess to Spend Money on Gaming is Different
legal/illegal downloads by country for the mobile game Pah!
When the subject of east and west is brought up, Hsu asks excitedly “do you know Pah?” Faced with a confused look, he explains that he is talking about a novel game that is played by voice. He brings up a table the creators released on individual countries’ payment/piracy rate based on its 90,000 users. The report (shown left) shows that Asian countries are at polar extremes. In 6th and 8th are Japan and Taiwan, respectively, higher than many countries in the west. At the bottom of the list are Malaysia, Russia, Macau, and China, the latter at a stunningly low 2.66% payment rate. “The Taiwanese are really willing to pay for their games. Others are not so much.” He bolsters his claim with data he’s culled from his MMORPG sister site and predecessor to GameApe, yatta.com.tw. “Taiwanese and Korean MMORPGs have an average revenue per user that is 3-4 times the cost to maintain a monthly subscription,” he says. “In many western countries, you do not tend to see the same Korean and Taiwan willingness to pay.”
Insight 4: The Issue With iTunes is GameApe’s Raison d’Etre
GameApe exists simply because it solves several problems with iTunes.- iTunes is in a bind with how honest it can be with regard to game quality. “iTunes is like a department store.What department store will admit they carry a dud product?” The reviews are instead carried out by users and are susceptible to publisher influence. He pulls up a top-100 game that has six 5-star ratings and two 4-star ratings in iTunes. “If I were a publisher, I could get 8 of my friends to do that. The honest reviews are the value added through GameApe.”
- The publisher also provides the information about the game. He points out an example of a game featuring screenshots of buxomly cartoon women but none of actual game content. “Of course they are only going to say it’s a great game in the description and choose the screenshots that will attract users.”
“The Editor’s Picks for Taiwan are clearly not picked by or for Taiwanese people.” An app called “Apps for the Great Outdoors” scrolls through the Editor’s Picks window of the Taiwanese app store and I see what he means. The apps feature surf reports and animal tracking skills. As we sit in an office nine floors up, in the heart of an urban center (locales in which most Taiwanese live), I doubt we’ll be doing much surfing or tracking. He asks rhetorically, “where are the Mahjong games?”
As our conversation comes to a close, I peek at the office outside the meeting room. Grown men are at their desks, fingers dancing away as they test out mobile games on their iPads. In the days of Snake, the very thought of being paid to do this would have been preposterous. And yet, 13 years later, here we are with these men, tapping, tapping, tapping. For the masses, indeed.
This interview was conducted in Mandarin and translated into English
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