So you guys left Blizzard and formed your own company. How long ago was that? And let us know why as well.
So after announcing Diablo III in Paris, my two co-founders, Brian [Morrisroe] and Sam [Christiansen], we left Blizzard because we were just inspired by the idea of doing something that was based on the real world. And we thought that the advent of smartphones and cameras, as well as GPS would give us an interesting opportunity to expose a lot of the game mechanics that we learned working at Blizzard doing everything from World of Warcraft to Diablo, but to apply it to a big audience. So that's what excited us, not just drive people to play hundreds of hours to get an epic sword on a PC, but to drive them to actually spend hundreds of hours to level up in the real world, and that can be as simple as leveling up by going to a fitness place, or by leveling up in music by doing stuff at a concert with your friends. So that's what really excited us. The mission for our company is to create new experiences for the masses by intersecting the real world and the virtual world. We launched a year and a half ago, and we're based in San Francisco, and we've launched our most recent app, called MyTown. MyTown now is the most popular location-based mobile game.
It is. I'm an MMO player for a long time, and when iPhone first came out, one of the things I thought of was, this is a device that knows where it is, can see where it is, has all of this information on it...a location-based MMO is kind of like the big thing to do. Was there anything else going on or did you have anything you took influence from at the time?
Our original idea was to make a social game called Booyah Society based around your Facebook and Twitter games, and then to fill the pause with communication. We realized though that we just tried to do too much at one time, especially for something that's more concise like the iPhone. Understanding that form factor, we took a step back, and we actually learned to simplify our app. So Booyah Society was last year, and we decided let's just focus on GPS. Let's build a game just around that -- what could be the most compelling idea around it? And then we came out with the idea of MyTown, which is essentially, a game based around real world property ownership.
I played Booyah Society, and I wrote about it, and the problem with it was that while it was cool to give yourself achievements or rewards for doing certain things, there was no check on it.
No validation, right. That's one of the biggest challenges when you start to intersect the real world and the virtual worlds. Now you have to spend 90% of your time thinking about proper validation. Because if someone really loves your games, he's going to get hacked and cheated. When you can validate activities through your backend servers like in a "pure MMO," it's a lot easier than, "Did you really go to the sports place or work out today?"
Yeah in Booyah when I played it, you could basically type in, "I flew on a unicorn today," and there was nothing there to check it.
Absolutely. So we took that step back and said well what can we do to actually incent [sic] people to be excited about an activity? And we said hey, property ownership is perfect, people don't want to lie about it, because they actually do care about the places they frequent. If I really like my local yogurt store, I want to buy it. That's a form of self-expression, they have an emotional tie to that location. And so once we realized that ownership was this incentiveidea, we wrapped the whole game around that, and generally the validation problem was solved. And the great thing too is that if you're checking in to the different locations in our game -- like right now, I can't check in to a place in Palo Alto or New York, I can only check in here. So the accuracy can be higher than in the past when you said that you can fly a unicorn or something like that.
Right. Now whenever we talk about checking in, people think Foursquare. And this is a fact that I don't think a lot of people realize: MyTown is bigger than Foursquare in terms of your users, right?
Right now, MyTown has hit 1.3 to 1.4 million registered users, so yes, they're at about 350,000, so we're about five times larger. But I think the biggest difference for us is that we have created a game that users engage throughout the day. The typical users for Foursquare and those social utility apps are about five to six minutes a day. We are now clocking in eighty minutes a day of usage for the average user, we have more users as well, and the cool thing is that we've created a complete virtual economy based on checking in, so I check into Moscone, I'm going to get more like virtual items that are different from going to an H&M. So for example, right now we're doing deals with H&M retail stores to award virtual items and goods based on proximity to their location. And it's really cool because, just this week, there are 40 million items being purchased and consumed. Every week now. And that's something that Foursquare has zero of.
For all of Foursquare's press and all of the people using it, it's not a game, it's a network. And what you guys have done is turn checking in to a game -- you can build your own stores, and charge rent, and earn points, and so on. Do you think that's why you have more users, or does it limit the potential audience by ruling out people who "don't play games"?
I think we started off at the same place as Foursquare, as a social utility. But then realizing eventually that we're a game, we'll be starting to diverge dramatically. I think the big idea here is that we're going to sit on top of the location graph, and we're going to be using all of this new data, check-in data, from Facebook, Google, anyone else out there. We're going to be able to leverage the location graph with all of this new metadata. Just like what the social graph looked like four or five years ago when Zynga and all of these other social games sat on top of it. So the big difference here is that we'll be the frontrunner to creation location-based social games that no one's ever done before. Foursquare and all of these other guys are actually creating the content that we'd love to use. We're currently going to use Foursquare's API and Gowalla's API. They're there to win the social-based platform play, which Facebook will completely wipe them out in about 6-8 months.
Yeah, outside of the realm of the iPhone, that's interesting right there.
The thing is, what differentiates them when Facebook decides to add a check-in feature that's part of their status update across all their applications on every single platform? The biggest difference is that they have 450 million users, and with such a large user base, they could work any deals with any marketers that decide to do that. I know that's the direction that Foursquare and Gowalla want to go -- they want to be an advertising platform based on location.
You've got a head start on that. You've got a deal with H&M already --
And I know back when you were working on Booyah Society, that's what you were talking about.
It's funny because we created the game wrapped around this real-world Monopoly idea, we started to garner 100,000 users a week, and now we can actually do some of the things we wanted to do with Booyah Society, the original vision. As we continue to partner with every venue in every location it becomes increasing more compelling for them to check-in and level up for working out, and we can have achievements based around that. And that's one of the things that differentiates us from these other products. And I think we're still like at the top 40 on the App Store after two and a half months. Pretty crazy.
In terms of virtual items, I know when you check into the game, you can get virtual items that will power up the game. I haven't seen in the app myself, but are there in-app purchases in there, and how's that working?
Yeah we're actually doing in-app purchases, where you can buy virtual goods to help you get more slots, add power, level you up more quickly. We're actually one of the Top Grossing apps in the App Store as well. We make money through in-app purchases, our second revenue stream is location-based ads, and then third of all, brand partnerships with all these different clients. So the great thing is that there's so many opportunities once you create a great game that people are spending an hour in, the value behind virtual goods that people want to spend and buy now, is worth a lot more the more time every day that people spend time in the app. They care about it, and actually, what's interesting too is that we're noticing that people do really spend a lot more on virtual goods and items because they're related to real locations. If it was just a random supermarket, that doesn't matter to me, but if it's the one I go to every day, my favorite Whole Foods market, I actually want to level up and upgrade it, because you can never own that in the real world, so it's kind of a cool fantasy of being this virtual property tycoon. We're realizing that you can have a product marketed with a real world idea.
It's almost like a social connection with a building, which is a weird thing to say, but...
Yeah. We're going to be launching an update next week that's going to be focusing on social, so we're going to have all the features that Foursquare and Gowalla have -- you'll be able to view other people's profiles, see the towns that they've made, the things that they've done. And I think it'll be very interesting for me to look at my friends and see what places they own. Because we actually limit the number of stores that you can actually keep. You can only have a maximum of 25. So you'll have to see if people are getting it because they want money or because they love their favorite Apple Store next door to them. It tells about their personality, and we'll have notifications where we can see what people are buying and selling. It's more interesting than just checking in, because I don't care if you went to Starbucks this morning, I only care if you check into a party or a club that I care about. How interesting would it be if you ended up in Napa and you bought like a hot new winery? I'd probably start a dialog or conversation if I saw that from a person on Facebook. Because it doesn't happen that often, when you buy and sell a property, but it tells you a lot about that person.
I did want to talk about the future -- you said there's a social patch coming?
Yeah, we're releasing another update next week focused on social. So friends lists, messaging, in-app messaging, gifting will be available there. And we'll start to add some very interesting viral growth mechanics or loops that haven't worked out yet on iPhone but have been done on other platforms. And this is the best way to defeat the issues that people are having on the App Store in terms of promotion -- it costs a lot of money to advertise to be on the top 100 charts. I think that people haven't spent a lot of time thinking about how to create all of these interesting viral channels. Imagine I gifted you with a new slot for your property, or gave you a little Godzilla art pack, or I visited your place and I pranked you, kind of destroying your town for an hour. These are the sort of things that I think can create really cool social loops, loops that haven't been done before, and the great thing is that people can send it around to their friends, and you don't have to advertise at all. Your cost of acquisition is a lot lower.
Is the company working on anything else or is MyTown your focus right now?
Right now, MyTown is definitely our number one focus, but as I mentioned before, we've started to understand now that we're there to create real experiences on top of this location graph, and now that we've spent a lot of time developing our location database, and as our guys are now veterans all at making iPhone apps, the time that it would take and the resources would be a fourth of the time we spent on MyTown, which already only took us two months to do. So we're very, very exciting about coming up with new ways to leverage what we've already built, and maybe a different theme or target market or something. So yes, we are working on a few other really exciting games, and that's an area we're very excited about as we grow.
Cool. Because you came from Blizzard, I want to ask: They've been poking around the iPhone, but what do you think of their strategy for it?
The relationship that we have with Blizzard is loose in a sense that they knew that we were going to be working on products that were going to be highly differentiated from a big MMO. Rob Pardo is one of our advisors, so he also has to really think about the implications of what we're doing in the real world. He's a great person, he has such a strong user experience design sense that we get a lot of really great feedback. I can't speak for the strategy of what Blizzard is doing in the next few years, but I think their products like WoW are so highly engaging right now that it makes sense to find ways to get their users or new users exposed to World of Warcraft. And it makes sense to me that building products on the iPhone or other platforms is a really great way to introduce it to more users or casual users. I know we've all heard of it, but there's still people out there in the iPhone/iPod touch base that might want to have a taste of something new branded with World of Warcraft. I can totally imagine them making a game based on the Murloc or something else. I think that could be really interesting to introduce it to a new audience.
And one last thing, with April 3rd coming up very quickly, MyTown doesn't really seem like an app that would work well on the iPad, but are you all interested in iPad?
We're extremely excited and we have been looking at the APIs a lot and kind of just trying to get as much information as we can to make a better deicision. Our strategy right now is to create some of the best experiences on the iPhone and iPod touch. That said, our product would probably work a bit better if there was a more refined GPS system on the iPad.
Is it a challenge then, or are you fine with just being on the iPhone?
We are currently investigating being on the iPad. We're all very bullish on that. That said, I think that if we were going to do something specific to the iPad, we would want to create an experience that's real world and that leverages something that's unique on the iPad itself.