Gaming Data That Makes a Difference: Interview with the CGA's Jessica Tams

Jessica Tams, Managing Director at the Casual Games Association, chats with LOGIN Beat about the emergence of casual gaming as one of the dominant forms of online entertainment, its business models, its markets and how all online game developers need to stay focused on the data that matters.

PAUL PHILLEO: Jessica, we appreciate you offering to be interviewed for this issue of LOGIN Beat. In the casual games industry you’re well-known, but for those who might not be familiar with you, can you tell us a little about your background?

JESSICA TAMS: I relocated from Utah to Seattle in the Fall of 1997 to enter the Physics PhD program at the University of Washington. After realizing I would be in school or post-docs for 8 more years, my motivations shifted to a job outside of academia. I got my start in the video game industry in 1999 at Sierra Online in Bellevue, Washington working on Gabriel Knight III. I spent the next 5 years as a programmer followed by 5 years in production and business development at companies such as Gas Powered Games, Trymedia and Oberon Media.  

There are a vast number of business models, including “freemium”, subscriptions, microtransactions and others, and numerous hybrid variations of these. What business models show the most promise for online games, both casual and “hardcore”?

Wow, another new word: freemium. There are many ways to make money in the wide world of video games – and all of them have their advantages and disadvantages. It is up to each individual company to decide which business model is the best fit for their expertise, their product and their consumer.

One thing everyone needs to realize is that once consumers get comfortable with a specific transaction model, they will be more comfortable returning to it time and time again. So while we might be hearing about new monetization methods and how one group here and one group there might be making money in a new and exciting way, they are not going to become the gold standard for some time. Our research shows business and transaction models are mainly driven by regional standards and it has been very difficult for companies to offer business and transaction models favored by say Russia to consumers in the USA.

There isn’t enough room here to go over all the different business and transaction models here, but we cover all the different business models in our research report which we will go over during my LOGIN talk ;)

What does “mass market” mean to developers of different game types game on different platforms? Can mass market have a common definition, and is targeting this audience generally the smartest business objective?
 
When you are creating a product, you can approach it from one of two ways: (1) pick your consumer target (mass market, enthusiast gamers…) and then plan from there or (2) pick a game characteristic such as game type (Adventure, RPG, MMO…) or business model and plan from there. Either way is a perfectly valid approach, I do not have any favorites as consumers will always respond to a well designed product – high quality execution is the limiting factor.

My friends in the hard-core video game space know there is plenty of money to be made from products for enthusiast game players. My friends in the casual game space know there is plenty of money to be made from the mass market.

Competition it tough in any established market and with the struggling economy there is less room for mistakes. I typically suggest looking at what your team’s strengths and interests and going from there. Given you can make money from just about any demographic or business model in the video game space, you might as well do something everyone is excited about.

Spil Games has recently announced they’ve surged to become the number #1 casual games portal in the US; OGPOP has announced $5 million in funding; and many other similarly positive news stories consistently turn up in the casual games business. What is being done right in the casual gaming business that other businesses in the larger interactive industry could learn from?

You are correct, SPIL GAMES has topped Comscore’s ranking which measure advertising reach. This is a wonderful achievement for an advertising monetized portal to have done so quickly. The great news is that increased advertising reach of casual games is just one of the many very positive indicators we are seeing in casual games. What I’m most excited about is that our industry appears to be healthy and stable across the board for many business models.

Historically, the casual games industry has focused on creating phenomenal products for consumers who many did not believe would play video games. There was a distinct lack of interest from speculative venture funds in the early days and the industry was forced to run profitable businesses. In retrospect, this has proven to be a blessing not only because of recent hard economic times, but also because consumers have been the driving approval factor, not money mangers.

The big news is that casual games industry as a whole has been able to create a vibrant and healthy industry while taking so little venture money. The majority of the venture funding has come into large and already successful companies such as Big Fish Games ($83 million) and King.com (€34million).
 
Given the title of your LOGIN talk, “Data That Matters”, what sort of less-important and inconsequential trends do you think business managers at any given game development company could get hung up on?

I think the biggest issue companies in the video game industry as a whole run into is they lose sight of the real issue: creating high quality products for a consumer segment. It doesn’t matter which segment you target or what your monetization method, the key differentiation lies in creating high quality products for the right price.

Properly using market research is about learning how the business operates so you may operate your business using data on the returns that you can. It is about setting the parameters of your product development cycle to ensure you can keep your company healthy and profitable!

The size of the overall market is inconsequential to your business. The size of YOUR market opportunity is what really matters.