We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference.
Day two of the conference begins with “Cutting Edge Mobile App Product Development: iOS, Android, and HTML5,” moderated by Kim-Mai Cutler. She joined by Zynga’s SVP of mobile Travis Boatman, Bionic Panda Games’ CEO and co-founder Charles Hudson, Karma Science co-founder Lee Linden and Red Robot CEO and co-founder Mike Ouye.
The following is a paraphrased transcript of the discussion.
Kim-Mai: Mike, your company has this thesis about how location enhances gameplay…
Mike: We ran some numbers and saw some gains in both retention and monetization. We use real life locations in our game and we looked at how many location players had. People who had 20 or more locations had a 3x rise in retention and monetization was 1.5x. We feel it’s a sticky thing to interact with real life locations in gameplay not necessarily check-ins.
Kim-Mai: Charles, your games are exclusive to Android and you were one of the first developers on there. How has the market place changed?
Charles: A year ago, there weren’t that many high quality games compared to iOS. but the quality of games has really gone up over the last year and so has the quality of devices. The hardware market has come a long way and developers can just now take advantage of it.
Kim-Mai: What about payments and conversion rates?
Charles: The good news on payments for developers is that we have a standardized thing to shoot for with Google Checkout instead of hacking together our own solution. It’s still in its early days and they’re still working out some of the kinks. Google is new and not 10 years old like iTunes.
Kim-Mai: How many more users are converting as a result of Checkout improving?
Charles: I can give you some sense. On per-user monetization, it’s up. Since we’ve switched from a combination of Paypal and Checkout to just Checkout, monetization is up about 25% in the last 6 months since we switched.
Kim-Mai: Lee, How has the space evolved since you left Tapjoy?
Lee: There’ s a ton of opportunity in mobile apps and gaming. You’ll see companies taking a mobile first approach. I’m excited about that. In terms of gaming and all other spaces, the quality bar is going up by a good margin. People realize they only have so much of people’s attention span and its an extremely competitive market. You have to have a high quality bar and be focused on providing value right away to users. The folks that are focusing on the experience right from the beginning are going to do pretty well.
Kim-Mai: Travis, we noticed Zynga has caught up on mobile despite a late start.
Travis: The zynga mobile team is a relatively new team, but Mark [Pincus] has a vision to translate Zynga’s success on Facebook into mobile. We’re focusing on a long -term strategy and not just quarter to quarter. Part of the investment is on cross-platform iOS and Android infrastructure and allowing people to play together, as well as supporting the amount of players that are playing our games at once and all players we’re going to have.
Kim-Mai: You have several franchises on mobile right now. Is that how you’re going to be organized this year, or will you add new genres?
Travis: We’ll change over time. We listen to what our players want. We don’t have games in some of the genres they want, like physics based games. We’ll continue to listen and try to bring great social games to those folks.
Kim-Mai: How do you decide which genres to enter?
Travis: We look at what our users are playing. We have a wide network and if we feel like there’s gaps in the games they’re playing or what their friends are playing, we try to look at those markets.
Kim-Mai: You’ve gotten flack from the indie community for too-similar games to games already out there? Where’ the line between a fair, innovative game and a copycat?
Travis: The most important thing is differentiating products. Value differentiating is super-important. When you have a free market and the switching cost is essentially zero, so if players find the games have no differentiation, there’s no value and they’ll stop playing. The players can test the game for free and if they find it’s fun, they’ll keep playing it. One of the key things about being differentiated is being social and letting you play with your friends.
Kim-Mai: What about the crime-based games you develop, Mike, Charles? Where’s the line?
Mike: We felt we needed to figure out location. With our next game, we’ll push limits on the genre and go really deep on location. I think it’s going to be interesting in the next couple of years. In regards to Zynga, like Travis said, it’s a free market economy. I think there’s a limit, but it’s important to make games that people like playing.
Charles: I look at it as a problem we’ve seen before. If you have two games that start off looking similar and one company has better distribution, that game is going to get better. It’s not about where you start, it’s about where you finish. Aqua Pets was a unique mash-up so we felt good about – but trying to “out-Ville” Zynga is probably not a good strategy. If you’re going to be an indie developer, focus on things like Mike’s doing. Try new genres, try new mechanics. If you build a company that’s easy to copy, easy to clone – expect competition.
Lee: I generally agree that its an extremely competitive market with very low switching costs. There’s three pillars: retention, distribution and monetization. If you can get a set of users that love your game, your apps and your service there’s a lot of value there instead of having users swap in and out every day. People are working on building more personal experiences and targeting specific demographics. I’m very excited about that.
Kim-Mai: There are different kinds of games that are starting to get freemium right that aren’t really social. How does that change your thinking about the kinds of games you’re developing?
Travis: I think for us, we’re focused on social games. We believe they’re strong retention drivers. For us, we’re trying to invest in how you play with others and different methods of finding friends and engaging with them.
Kim-Mai: Your games are all ranked well on Android. What do you have to do differently on iOS?
Mike: It’s not that different. Producing a good game that monetizes well. It’s all about creating really awesome games that people want to play and pay for.
Charles: We don’t build for iOS. But every time you improve the quality of your app, players stick around longer. My sense is that file size matters more for your Android than it does for iOS. So a big game on Android is going to be at a slight disadvantage when it comes to downloads.
Travis: For us it’s about parity. Fair competition between the platforms so people want to play with their friends and feel like it’s fair.
Kim-Mai: Facebook didn’t have a business model hammered out at the start, in contrast to Apple. Is it possible for a single company to have the same kind of market share on mobile that Zynga has on Facebook?
Travis: Clearly, we hope so. [Laughs] At the end of the day, it does come down to scale and social density. We’ve seen it in Words With Friends where’s there’s a buzz factor and an economy of scale where people all want to play with their friends. That gives you the size advantage. We hope to see that some day.
Mike: I think it’d be interesting. The main difference between Facebook, Google and an Apple is that Facebook has cross promotion, Apple is a product company and Google is an engineering company. It’s still really early on. It remains to be seen who is ultimately able to take most of the traffic.
Charles: I think you’ll end up with a couple of really large networks that have massive reach like OpenFeint and ngmoco:). But I don’t know that you’ll have one that reaches everyone like Zynga thinks. I think as a player, you don’t care about your friends, you care about who’s playing the game. It’s about aggregating like-minded players. There are different archetypes.
Kim-Mai: Facebook is trying to build a strong mobile platform. In the last couple of months, they launched their HTML5 platform. What do you think the opportunities are there?
Mike: I think they’ve gone on record saying 80 percent of the company is working on mobile. We haven’t gone into HTML5 yet. We’re all [objective C, java]…
Charles: We allow players to publish things to Facebook and populate their game with their Facebook friends. We find that our player to player connections have more velocity. Unless you have really good multi-platform support there are limits to what you can do on Facebook and there’s a limit to what a player wants to publish to their feeds. It doesn’t work as well as connecting our existing network.
Kim-Mai: How is Zynga doing on mobile? You’ve got your Dream apps and some others.
Travis: We’ve got a couple of “express apps” where players can play games on Facebook via mobile. We’ve seen traction there, but there’s a vast difference between the PC and the mobile experience. In terms of how our players connect with each other we’re trying to give them access to their friends in any way necessary. I think they find their friends through FB.
Lee: I’m a believer in this direction. I think the pieces haven’t aligned to create a channel for distribution through Facebook, but they’re getting close. They’re asking users questions about what they use and what they like, so there’s motivation to share. It’s hard to share outside of really basic content right now, but if you unlock that and unlock friction, it will create cool opportunities.
Kim-Mai: What about the Japanese mobile social networks? Do any of those interest you?
Mike: We maintain our own social graph. We’ve talked to them. The big opportunity there is partnering on distribution and discovery. It’s harder on iOS than Android. We’re into self-publishing.
Charles: We have a similar view, but we’re user-driven. If a ton of them wind up on another network, we’ll support them.
Kim-Mai: What’s your Android versus iOS development resource allocation going to be?
Mike: It’s 50/50. We’re going to do a simultaneous launch for our next game with a shared back end. There’s some challenges there, but it adds a lot for persistent RPGs. Front end mobile engineers are hard to hire. There’s some challenges there and adds a level of difficulty but its worth it.
Kim-Mai: What about Android versus iOS revenues?
Mike: iOS is higher as a userbase, but we’re seeing really good revenues on Android. We’ve been as high as top 5 [on the top grossing Android app charts].
Travis: We see meaningful businesses on both and we invest in both. We’ll listen to what our players do and invest where they go and we’re seeing growth on both platforms. We’re going to invest where our players are.
Audience Question: How confident are you in the future of Facebook’s HTML5 platform?
Mike: We’ve met with them. We’re taking a wait and see approach. There’s a tremendous opportunity for distribution there. We’re not putting HTML5 resources on it now, but that could change rapidly if a distribution channel comes up.
Travis: We look at HTML5 in two parts. One is value add for development teams — it makes it easy to go cross platform. The other side is value add for users — does it work, is it free? We’re waiting to see there.
Kim-Mai: How many of you are on the Amazon app store?
Charles: We were on Amazon early but we took our apps off. Fragmentation is an issue on Android and the Kindle is Android-like, but it is a pretty different platform and it appears to be heading in a different direction. It’s not just can you afford to support it, can you afford to support it through its iterations? We’ve decided as a small team that we want to stay focused on Android.
Mike: We ran into issues early with payments, but there’s a lot of Kindle Fires out there.
Travis: First we look at users on those devices, how quickly we can communicate with them, then how compelling games are on the platform and then social connections. The way we approach these platforms is how many devices are sold, how we can access our user base and how is the game experience in the the platform. As they get stronger in each of these areas, we invest more.
Kim-Mai: Earlier on in iOS, we’d see games launch and have a lot durability. That’s changed, and some say the peak is shortening because of competition. Are you seeing that? What can you do about it?
Mike: It’s definitely extremely competitive. There’s a lot of investment and a lot of developers. Fortunately, there’s the Temple Runs, which is awesome for the whole ecosystem. I think there’s going to be a lot of change and ultimately players will decide.
Travis: It’s one of the most competitive markets out there. How it changes over time has to do with shifts in technology. The current shifts in business models and technology have made it more turbulent.
Kim-Mai: Does that change how much you want to invest in the platform?
Mike: Our advantage is that we’re smaller and faster so we try to move with speed at all times and get quickly to market. I think that’s an advantages of a start up versus a Zynga. You have to release when you understand distribution and what will work and not work.
Travis: The reality is that one giant team isn’t doing the whole thing, we have a bunch of small, innovative teams working on different things, so they can move fast.
Kim-Mai: How long do you spend on development?
Travis: Ranges extend or shorten based on complexity. One thing I would add, the more socially connected games take longer to see if they can handle so many people playing together.
Kim-Mai: What is the lifetime curve of a game on iOS and Android compared to Facebook?
Mike: It’s definitely shorter, but I think the lifetime of a Facebook game has shortened as well. It’s so competitive and there are so many studios pushing games out every day and there’s no switching cost. We’ve seen some good longevity with Life as Crime.
Charles: There was a huge push on Facebook to get the game out to test it and then iterate. You can force all your players on Facebook to update when they load your game, but on mobile the first version of your product must be better. If you invest up front, you spike early and the tail is much more gentle compared to Facebook. We’re trying to figure that out.
Kim-Mai: Is that maybe because Android isn’t as competitive right now?
Charles: Android is already pretty competitive — I think its a myth that it’s not. If you have a game that’s on your phone, you get so many different decision points, you have all these times during the day where players can engage. On Facebook, it’s just those 15 minutes you spend on CityVille and that’s it. You can play many games for three minutes at a time on mobile. I think we see more short sessions and that drives playtime.
Kim-Mai: Now that the bots are going away on iOS, how does will that affect user acquisition? Any thoughts?
Lee: Like any other form of content, advertising plays a huge role in who gets out there. In other mediums 30-40 percent of budgets go to advertising. Good mobile advertising and better marketing will be a great channel for folks. Retention and new social channels to share what players like will be innovated upon. At the end of the day it’s a really competitive, extremely transparent marketplace and I think there’s still a huge demand for advertising.
Kim-Mai: In the early days of TapJoy, did you have to contend with these bots?
Lee: Yeah. There are different ways to engage with mobile users. We’re fans of presenting the ad to real human who could try an app. Anything that doesn’t do that seems weird to me. In markets, there are gray areas where people get around the rules. Ultimately, good advertising and services will prevail.
Audience Question: This is a question for Zynga. Some of your mobile games monetize really well, others not so. Are you going to develop new methods of monetization to make up for games on mobile that don’t monetize as well, or just absorb those users into your greater population?
Travis: Obviously we’ve had different forms of monetization and mechanics and success with different apps. We’ve seen in-app purchases work well in other games. We’ll invest where it makes sense.