Executive

The Crazies Case Study

Friday, March 5th, 2010

Now that our first Facebook title, The Crazies, has been out a few weeks, I thought it would be useful to analyze what it has shown.  From my perspective, the success of The Crazies has definitely proven the value and convergence of traditional media properties and social gaming

First, given that the game had a two month development cycle and it was Merscom’s first real Facebook title, the numbers are great.  With less than $10,000 in marketing, it already has about 250,000 monthly users (MAU).  It is also monetizing at a rate consistent with industry norms.

It’s not the monetization or quick growth, however, that I see as an indication of the value of brands.  It’s the way both Merscom and Starz were able to work together to get value that other social game companies are not able to achieve.  On Starz’s side, let’s not underestimate the value of the movie’s marketing campaign.  With over $30 mm spent on marketing, there was incredible awareness of the IP, which made it much easier for us to get people to try the game.  Additionally, that marketing spurred a lot of interest in the movie that Starz could then leverage for the game.  For example, the following post to Fans of the movie reached over 150,000 people:
 

From Merscom’s side, we were able to generate a lot of interest in the film.  An email to player’s of the game suggesting they go see the movie the weekend it premiered had a phenomenal 40 percent click-through rate to the Fandango link.  A link within the game driving traffic to the movie fansite generated over 25,000 clicks.  And we have just put the following pop up at various levels of the game to drive additional traffic to theaters:

It’s still early, but to say I am pleased at the way we were able to use a major media property in a social game is a great understatement.  I am now more confident than ever that we can replicate our success in the casual space that largely came from working with media companies in the social space. 

Lloyd Melnick
Chief Customer Officer


Social Objects

Wednesday, March 3rd, 2010

I was at a speech yesterday by Hugh MacLeod, author of Ignore Everybody (gapingvoid.com), at the Purina Digital Marketing Summit.  The topic was social objects, primarily that the true value of most objects/things is the ability to share it with people.  These objects include everything from iPhones to sea shells.  I found it particularly interesting because of its relevance to the social gaming world.  A lot of arguments have been made for the success of these games but Hugh’s argument suggests that the reason people play this games is to share their experiences with their friends.  Thus, the gifting and wall posts are the central element of the game, not the actual gameplay experience.  The ability to share what is inside the game, the virtual items, the photo galleries, etc., all build on the social experience. 

What it also suggests is that the vocal proponents of the I Don’t Care About Your Farm, Fish, Mafia, etc., groups really don’t get why their friends are playing and posting.  It’s not about the farm or the cafe or the mafia, it’s an object for your friend to interact.  What these people are saying is either I don’t understand social media/Facebook or I don’t care to interact with you: how rude.

Lloyd Melnick
Chief Customer Officer


The Crazies Goes Crazy

Friday, February 19th, 2010

Just a quick note that our first true Facebook release, The Crazies, has surpassed 125,000 players (MAU) with over 16,000 playing a day (DAU).  We’ve achieved this success with less than $2,000 in marketing as we are still adding most of the virility and monetization features. 

Although I’d like to take all the credit for this success, what it really shows is the value of properties in social gamesThe Crazies is based on the upcoming Overture movie and our game is co-produced with Starz, which provides the star power (get the pun, I’m funny) to overcome the limited marketing spend.  Definitely bodes well for our next few Facebook releases.

Lloyd Melnick

Chief Customer Officer


The Joy of Shopping in Social Games

Tuesday, February 16th, 2010

I had a realization today that the explosion of people playing social media games is probably largely due to the economy.  It’s not that people are cutting back on other media or that “Freemium” is the new business model, it’s that many people can’t afford to go shopping anymore; however, they still need to feed their addiction. 

With millions of people forced to cut back on their shopping habit, they need to get their fix somewhere.  Enter the virtual stores on Farmville, Happy Island, Mafia Wars, Cafe World, and such.  There they can spend 30 minutes or more a day buying items without worrying about getting a call from Chase or Citibank the next day.  I really think that people’s desire to shop and the economic shackling of that desire is one of the key reasons behind the popularity of social games.

Lloyd Melnick

Chief Customer Officer


Facebook Game Dashboard

Monday, February 8th, 2010

Now that Facebook has launched its redesign I am sure there will be a lot of posts about what it means for the social gaming sector.  Rather than parrot what the 150 “experts” will be writing, I wanted to comment on a couple of observations. 

First, it was very interesting to see the breadth of games my friends are playing.  It’s not just Fishville, Happy Aquarium, Mobsters 2 and the other top games, but there is huge variance among people.  They also seem to be very open to trying new, innovative titles.  Though anecdotal, it shows people are not as set in their purchase patterns as they are in, say, the casual gaming space.  Although the games often share a core game play mechanic with leading products, it demonstrates that by fast following with a unique twist that reaches customers on an emotional level there are tons of opportunities.

My second observation is how aggressively the major social game companies are advertising on the game dashboard to people already playing their games.  This shows the importance of ensuring the games monetize well to justify the cost of bringing the player back (and I have seen these ads even for games that have a high level of organic engagement).

Although you will see many more posts across the industry about the Facebook games dashboard, these are my two cents (and you got them for free….how lucky!).

Lloyd Melnick

Chief Customer Officer


Facebook Credits: Social Media Money

Saturday, January 30th, 2010

Anyone who has known me for at least 15 seconds knows that you are probably not going to find anyone more skeptical/cynical.  All the chatter about how Facebook credits will invigorate the Facebook gaming space didn’t really have much of an impact on me…until I started playing Happy Island. 

In three days, I have spent more real currency than I have in several months playing Café World, Tiki Farm, and Fishville combined.  It is just so seamless and easy to spend money that you can’t resist (or at least I can’t).  This is a game changer (pardon the pun, but again, my blog, I can do these type of things). 

It’s very exciting and I can’t wait until we get Facebook credits in our games.  Stay tuned!

Lloyd Melnick
Chief Customer Officer


The Economics of Social Gaming and Social Media

Friday, January 15th, 2010

It seems that every week we move forward in social gaming we come across another fun challenge.  This week it became really cool.  For the first time in over sixteen years, I am able to apply my economics background to the workplace.  For those who don’t know, I have an undergraduate degree in Economics from Johns Hopkins where I studied under Dr. Steve Hanke (Forbes columnist and advisor, either current or past, to Argentina, Lithuania, Bulgaria, Montenegro, Ecuador and others).  I completed the coursework for a MA in Economics from George Mason under Nobel Prize winner James Buchanan.  Afterward, I was an economist of the US government for three years and had one of the first academic articles published on the European online retail market in 1989.  Despite this training, I have not really had an opportunity to apply this knowledge to Merscom since co-founding it 16 years ago.  That situation changed last week!

Unlike with our core and casual games, our Facebook social games rely on an in-game economy to generate revenue.  While developers, especially ours, are brilliant at creating fun entertainment experiences, very few understand the principles of economics.  Even when looking at highly competitive products, it is obvious that they understand gameplay but do not understand economics.  In their defense, the leaders of many real economies really don’t understand economics either, present company included.  I am spearheading Merscom’s efforts to turn virtual economies in our social media games into something that both enhances game play and improves monetization… and I love it.  It is nice to step back from day-to-day activities building and running a business to really explore a situation analytically.

Lloyd Melnick
Chief Customer Office


Social Media Gaming: Merscom surpasses Big Fish on Facebook

Monday, January 11th, 2010

I know it is comparing apples to oranges and bragging, but hey, it’s my blog! 

This weekend, Merscom’s first app, Drinking Buddies, has more users than Big Fish’s Page has fans (8,598 to 7,351).  Now I love the folks at Big Fish (seriously, they are an awesome company to work with), but I am really proud of the Merscom team in putting together a project on a low budget that is growing so quickly. 

Lloyd Melnick

Chief Customer Office


Seth Godin’s blogpost

Sunday, December 27th, 2009

I was recently reading one of my favorite blogs (Seth Godin’s blog) and came across an entry that confirmed much of my thinking about the offers controversy in the social gaming space.  In my last blog post, I said that the discussion of offers for social media games such as Mafia Wars has been over-hyped.  In Seth’s blog entry, he discusses all of the “bloatware” that is included these days with computers from all manufacturers (http://tinyurl.com/y87l8l8). 

In the discussions about misleading offers, most of the commentators implied this problem is unique to social games and this exploitation will lead to the downfall of social media games.  Seth’s blog shows that scams are showing up in many industries and companies will do almost anything for a buck.  The fact that the PC retail industry is of magnitude larger than the social gaming space despite these practices shows that the offer controversy is not the industry breaker some claim (and others hope). 

Please do not infer that I am condoning misleading offers. I do feel they hurt the consumer and thus hurt the industry.  There will, however, always be companies that will do anything for revenue but these are the companies that will destroy our industry.

Lloyd Melnick
Chief Customer Officer


Social Gaming and Facebook: Offers Benefit Everyone

Sunday, December 20th, 2009

In my last entry, I discussed my feelings about the hype around “Scamville,” which revolves around the industry controversy about offers.  I am not going to defend misleading or illegal offers.  There are bad fish in every Fishville, but offers are as good for the end-user as for the game developer.  We often ask our staff to play competitors’ Facebook games to benchmark. What is interesting is that after they have played them for a week, we’ll ask if and how much money they spent.  While sometimes someone will use direct pay methods (i.e. Paypal) to purchase virtual goods, the majority use offers to enhance their game play experience. 

The big question is:  what do they think of using offers to get virtual items?

Many expressed their approval because they enhanced their social gaming experience.  They were able to play the game longer and enjoy it more than people who just used the “free” elements.

Interestingly enough, many people stated that they did not feel like they were spending money.  These days everyone is on a tight budget and they usually did not have the luxury of spending $5-$100 on a game, especially around Christmas.  Instead, they could gain the same benefits and their bank account (or credit card debt) would not be affected.  They realized the game companies were able to monetize the offer but it didn’t matter because they gained something without direct out of pocket cost.

These are two very strong drivers that point to the continued existence of offers, but, more importantly, social game companies should not be fighting the use of offers.  The results are still the same: offers are good because the end user is happier with the enhanced gaming experience, the advertiser is happy as they are getting a very measurable marketing spend, and the game company has a nice revenue stream. 
 
The best idea is to embrace the honest offers while declining the misleading offers. Beneficial offers are a big reason social gaming has such potential to everyone.

Lloyd Melnick

Chief Customer Officer