So are the console dev companies going to fork out the initial costs and go with the social flow?
Istpika is anticipating the trend.
Here’s an interesting article on the topic.
Source:
Talking With Accel’s Kevin Comolli About This Week’s Playfish Acquisition
Last week EA announced it had acquired the social game company, Playfish. For the social game industry this is big news.
Kevin Comolli has been on the board of Playfish since the middle of last year, when Accel led Playfish’s $17 million Series B round along with Index Ventures. Accel is also, of course, an early investor in Facebook.
Q. Does the thesis that led you to invest in Playfish still hold today?
A. We got interested in online gaming a few years ago. We were attracted to Europe because it didn’t have the same console penetration that the US did, and we really thought there were some good opportunities in both online and social games. A lot of people entering the market are coming through online games.Q. How are social gaming companies like Playfish being valued?
A. It’s a combination of using comparable financial metrics, and strategic premiums. Part of EA’s interest is their need to move online, and onto social platforms, and sooner rather than later. There’s a strategic premium because you’re not only paying for the existing titles and pipeline, but for the team.Q. What is your view on the state of the payments ecosystem right now?
A. It’s an incredibly fragmented industry. Gameforge has something like 90 payment providers around the world. You go from scratch cards in one country to premium SMS in another, like Russia, where the carrier fees can be 70%, to PayPal. There will be a combination of innovation and consolidation.Q. What do you think role of advertising will be in monetizing social games in 2-3 years?
A. That’s a tough question; it’s still evolving a lot. Playfish. Playfish experimented with advertising early on but quickly pivoted to almost entire reliance on microtransactions and in-game purchases. Gameforge is also totally microtransaction based. Having said that, it would be foolish for me to think that advertising would not play a very large role going forward, partly in game, and partly through clever non-scammy techniques.Q. Any final reflections?
A. The idea of spending $30 million, $40 million, $50 million on a game, putting it on a truck to Wal-mart or Best Buy, and not knowing who your player is, is all kind of flawed. .. Playfish is all about the quality of the team and the quality of the games.
Istpika is looking forward to the many changes in the industry and is focusing on virtual goods in our app dev. Watch this space!
