ICE 2014 Interview – Tatem Games Igor Karev on Monetization of Social Games

igor_karevLooking ahead to ICE 2014, SBC looks to put the leading topics at the front of this years ICE 2014 conference.

The SBC Team caught up with Tatem Games CEO Igor Karev to discuss social games monetization. Igor will be discussing  strategies for social gaming and how to detect and understand player behavior with regard to social games and gambling. With more than 20 years in gaming development Igor is a man in the know!

Igor will be part of the Social Gaming panel at Ice 2014 – “How to monetize a pure social gaming business?”

 

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SBC: Hi Igor, great meeting you! Can you give our readers more insight into Tatem Games and your company’s games and services?

Igor: Great to meet you too and thanks for inviting me to this interview. I started Tatem Games in 2009 as a mobile-focused company, after having been working on big PC games with my previous company Action Forms.

I really like the concept of mobile gaming, which implies that people can play games anywhere with minimum effort, and I think Tatem Games really caught this trend at its inception.  Within four years we have entered Apple AppStore, Google Play, Amazon and Blackberry World marketplaces and have grown our team from 4 to 55 people. Our games are played by over 25 million players around the world and cover many popular genres. We are a very agile company and are always open for experimentation.

In the beginning of 2013, we have seen mobile and social gaming overlapping and decided to try social gaming. After some research we have seen that social casino games are consistently successful and in September we published a beta of our first Facebook game Tower Slots, now gaining experience on this market as well.

SBC: Social gaming is now a saturated market, how does your team make your products appealing and also make them stand out to customers?

Igor: I believe that a game, like any work of art, reflects the creators’ personality and mood, so the first thing we do to make appealing games is hiring best people and creating a cheerful and inspiring atmosphere in the studio.  When people are passionate professionals, stay on top of latest development trends and proactively offer non-standard solutions, half of job of creating great products is already done. If you look at our portfolio, you will notice that we don’t have clones or sequels: every our product has clearly unique features.

We show our products to the people outside the company at the earliest stages of development and treat the feedback seriously. It is a little heart-breaking, but sometimes we have to discontinue or pause a project, even if we thought initially it’s a good idea but the test audience didn’t react to it in the way we expected.

We have also fully embraced the notion of providing service, not selling a packaged product, and work hard after the game is live. We analyse players’ behaviour and are not afraid to change the game considerably if necessary.

 

SBC: Are Social Games too dependent on Facebook as the platform in which to drive and attract customers – should they look to build acquisition and revenue competencies through other mediums?

Igor: Games that people play with their friends through the medium of computer devices don’t only exist on Facebook: we see great abundance of browser games, which are very social, and mobile and console games are played with friends too.

If you speak of games on Facebook, they are as dependent on Facebook, as iOS games are dependent on Apple, or PlayStation-exclusive titles are dependent on Sony.  This has its drawbacks and its advantages, but for small and medium studios there is not much choice. The platforms give the access to the audience, which developers are looking to engage.

Some companies are able to build networks of their own and it’s understandable why they’d want to do so, but it requires a lot of resources and is much harder for casual games.

On mobile, we integrate APIs of different social networks to give people a choice: usually Facebook and Game Center, but it depends on the game – for some games, Twitter works well. Also, if you look at different geos, Facebook dominance is not as prevalent as in US and Europe: Russia and the region have their social networks, where gaming is very popular, as well as China and South Korea.

So, I’d say it’s not so much dependence on a network rather than on segments of the audience: the developer should make the game most comfortable to play for the specific user and reach out to every user segment using the appropriate channels.

In terms of monetization strategies and if we speak about in-game purchases (not ads), I believe the companies should rely more on their game’s design rather than common practices for the platform. It is the design of the game that creates a need and a wish for certain virtual items/actions, and the platforms in this instance are just means of easing the purchase process for the player – something they are doing quite well.

SBC: What mechanisms has your team built in order to gauge monetization of your gaming portfolio? What are the key indicators that a game will be a success?

Igor: We haven’t invented anything new here, at least so far. We set KPIs for the game based on available market data and our previous experience. Then we do a test launch on a small audience, often with limited content, and measure monetization, game-play and organic growth indicators, making changes to game balance and game flow on the way. After we see a positive ROI, we make a global launch.

I like to think of all our games as successful, because I am in business long enough to know that besides commercial success, released products can be useful to the company in different ways, sometimes not obvious. For example, some of critically acclaimed products are not that popular with the public but they make the way for acquaintances with key media and possible partners. Some games need reskinning, some games need more specific targeting, and some need a change of business model.  Certainly, if we have a hit for mass market it’s quite easy to spot at the stage of user testing and test launches, but if things are not all so well from the first try, it’s not a reason to give up

SBC: Free promotions and incentives are communicated to users, these are essential  in order to gain scale for your games, however they can also be harmful to your game, how do you look to control this mechanism?

Igor: Nevertheless games have to monetise by getting users to pay for their content. Can you give advice in how you can get your user to make their first deposit?

It’s a common knowledge in the industry that overcoming the barrier to making the first purchase is the most difficult and, varying from one game to another, less than 10% of ‘freemium’ players convert to payers. We fine-tune the balance in our games so that the premium currency or premium content is really desirable to the player or helpful to progress faster. Our premium currency is not impossible to get without paying, but it’s given to the player in a seemingly random way, so they can’t mine for it, but they get enough of it to see the benefit.

We are now developing our knowledge of user segmentation and already see good returns from targeting specific players with specific discounted offers based on their behavior. Because each game is different, it’s hard to give a specific advice that would fit all, except for one advice: test. Create incentives to in-game purchases on different stages of the game, experiment with limited time offers and special discounts and see how they convert. Define the pattern of those offers that convert better and use them to create more.

SBC: How much exposure to other competitor’s games do you expect your customer to have, and what effect has this had on conversion of your customer?

Igor:  The market is saturated if you look exclusively at statistics, but there is just too much noise. Sadly, not all games are good and if you look only at high quality social games, there are actually not so many of them. Very few key players control the majority of the market. It drives the user acquisition costs up, and makes it harder for smaller studios to promote their games, but from the user perspective, he is basically seeing multiple ads of a narrow selection of games all the time.  

If we speak about games broadly, I don’t think there is any problem with the players being exposed to other games, because at different instances of our day and in different moods we want to play different games: easy puzzles, deeper strategies, action-packed arcade games. Within categories the competition is more noticeable but I believe the ultimate judge is the user’s experience and if our players leave, it means that our game is not sticky enough, rather than someone forced them to stop playing by showing ads of other games.

We have a lot of experience with advertising on mobile. At first we were reluctant to integrate ads of other games into ours but when we tried it out, we saw that not only it’s a viable source of revenue, but also it had absolutely no effect on the churn rate. People are free to check out new releases and find more entertainment for themselves, but if a game is good and engaging, they will come back to it regardless

SBC: You are speaking at ICE 2014, what do you want delegates to take away from your session?

Igor: I’m invited to a panel that would discuss the social casino games monetization. I have been to ICE conferences before and I’ve met many people who own or work for land-based casinos. I noticed that many of them struggle to keep up with digital world and are puzzled by the abundance of platforms, marketing techniques, and, most importantly, monetization.

As someone who comes from the digital gaming side, I hope to offer some insight on how the audience on mobile and social platforms are different from the usual casino audience: who they are, what they like, and what they consider worth paying for. As a result, social casino experience should be slightly different from usual casino experience: it is more social and more casual, which is something the companies should consider when bringing their games to Facebook. Also, social and mobile games are more generous to the player and are more tolerant towards non-payers due to user’s short attention span and greater choice at hand. Knowing the retention mechanisms and spending-encouraging mechanisms for every particular platform is not less important than having a proven mathematical model, so I’m sure the discussion will be insightful as the panelists exchange experience they learned in different markets verticals.

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Igor Karev – CEO of Tatem Games

 

 

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