The Social Gaming Summit: Casual MMOs and Immersive Worlds

Friday the 13th: An inauspicious day for the superstitious crowd, but a great day for attendees of the Social Gaming Summit, held in San Francisco. The day saw a schedule full of great panels, populated by some of the industry's finest movers and shakers, among them representatives from Gaia Online, Nexon, Three Rings, and Gamasutra, among others too numerous to list here.

A particular highlight of the conference for this blogger was the panel entitled "Casual MMOs and Immersive Worlds", which provided a lively discussion on what it means to create a virtual social space, how to monetize free-to-play content, and what exactly is a casual MMO? Trying to divide attention between listening raptly and taking notes is difficult; here is the result, along with the panelists, after the jump.

The members of this panel are as follows: Craig Sherman, CEO, Gaia Online; Kyra Reppen, SVP and GM, Neopets; Min Kim, Vice President of Marketing, Nexon America; Patrick Ford, VP of Marketing and Community Development, K2 Network; Moderator: Joey Seller, Editor, Virtual Worlds News. What follows are notes hastily scribbled during the panel, and expanded to provide meaning and content. In no way should these be read as direct quotations; the actual dialogue was much more intelligent than these summaries indicate.

Moderator Joey Seller: What is a casual MMO?
Kim: Nexon fathered casual MMOs with games like Maple Story. For some reason, Americans don't like the term 'casual', but our Asian community has no problem with it at all. It's a bias of perception; Americans like to think of themselves as "hardcore".
Sherman: We don't call Gaia casual. It's got elements of social networks and elements of games. Social networks are a communications tool. Gaia is an online hangout.
Ford: We want to expand our demographic, looking to bring in younger, female gamers. I paid for my son's Neopets.
Reppen: Good!
Kim: Casual is dependent upon on how you approach it. People play Texas Hold'em online, which you might consider a casual exercise, but sometimes hundreds of dollars are wagered, and that doesn't seem casual at all.

Seller: Why is everyone looking at casual games now?
Ford: There's clearly a shift happening. Commitment is key; my son calls me to ask for money for a microtransaction for a game, when 10 years ago he might have been calling for money to go see a movie.
Reppen: Gaming is the primary experience for today's youth. Gaming is becoming the primary entertainment.
Craig: More interactive entertainment is the shift.
Kim: It's about consumer behavior. The Internet became a place where you live, rather than shop. Kids are looking for things to do there.
Reppen: It's an experience that's there at your demand. Missing an episode of Lost impacts your understanding of the show's story, but you experience your game at your own time.

Seller: The freeplay element is crucial; how do you monetize freeplay?
Reppen: Build the community. Customized avatars makes it meaningful to buy into that. Kids talk about the price of a movie being comparable to buying items to make their Neopets special. This generation understands digital entertainment.
Sherman: You have to offer something of value, and give players a means to pay. Obviously, kids don't all have access to a credit card or Paypal. Sometimes team members open envelopes from users with quarters in them.
Ford: Accessibility of payment methods is paramount. Only a small percentage will pay. Who is buying? What are they buying? Understand your audience. The majority will never pay.
Kim: Increase engagement. You can't engage players who play under an hour a week. You're selling social experiences, not items. The type of engagement depends on the type of game. The needs of an Audition player are different than those of a Maple Story player, or a Kart Rider player.
Sherman: As with any social network, it's important to find friends right away. New users play alone and probably won't pay for items that they can't show to someone; hardcore players do all the social tools and spend money.
Reppen: A sense of ownership is important.

Seller: What's the split between casual and hardcore? How do you develop for both?
Kim: They're two different sides of the same thing. Maple Story is all items, but we're experimenting with ads.
Sherman: I'm a big fan of Second Life. I admire what they've done with their product, and how it's been monetized. But the Scion campaign didn't go well. We did better with Scion. We spent four months developing this model. Turned down many advertisers. Tried to find the right fit. Tried to find ads that add value. It turns out that kids do like brands. Scion gave our users the ability to have cars. It's about authenticity and listening to your userbase.

Seller: Every game here came from the ground-up. Is there still space for people to do well here? Is the market crowded?
Ford: I won't discourage anyone from entering this market.
Kim: I think it's a great time to jump in.
Reppen: There's lots of room for different genres, like TV. But new developers had better be prepared for the amount of work necessary, after the 'ship date'. This market is unlike a traditional product-based field, where you work on one thing and at some point it's done, and you ship. This space is in constant flux.
Sherman: I think you'll see 50 Club Penguins in the next few years. There's room. Build what you want to see. Build from pure love.
Kim: We haven't seen the tipping point yet. We've had 90% penetration in the grade school market. There used to be a stigma attached to the word "nerd". Now, kids say "I'm a nerd; I don't care, leave me alone."

At this time, the panel opened itself to audience questions.

Q: Is there a rule of thumb; what percentage of the audience are you making money from?
Kim: 5 to 10% is doing pretty well. We get disparaging comments from other companies who think that's too low to consider a success, but we always tell them "My playerbase is 10 times bigger than your player base."
Sherman: The highest I've seen is 16%.

Q: (to Reppen) Do the plush sales cannibalize the online audience?
Reppen: Not at all; it's additive. There's always added value in bringing in new users, and plush toys help that.

Q: Is there a difference between what you do and the hardcore MMOs?
Reppen: Accessibility.
Kim: Price point. Getting the client easily.

Q: Is the social experience about meeting new people or connecting with people you already know?
Sherman: Mostly about meeting new people. Any place that uses an avatar system allows fewer consequences than real life. You end up having a more deep interaction with strangers because there's no perceived risk.
Kim: Virtual friends can sometimes be better friends than real life ones. People are spending more time online talking with each other than meeting face-to-face. These relationships mean engagement in the virtual space.
Reppen: Kids can't always have a playdate, but they can hang out with friends online when they can't in real life. In-world gaming events provide structure for meeting new friends.