Chillingo is one of the most prolific game publishers out there. The UK company has published tons of games on tablets and smartphones, from free-to-play hits like Tiny City and Iron Force to last year's incredibly imaginative Icycle: On Thin Ice.
They've published a huge range of games, and they still do, even since being bought up by EA in 2010. So I jumped at the chance to speak with Rumley.
Our discussion touched on the challenges of balancing profit with pleasing players, free-to-play vs. pay-to-download, the benefits of interactive advertising, the maturation of the Asian free-to-play market, the importance of games-as-services, and much more.
Read the full transcript below.
TabTimes Games: Chilingo deals with tons of games. How do you find the balance between offering games with lucrative business models and not pissing off players?
Ed Rumley: The Chillingo business has changed a lot, and we've had to change a lot with the evolving business models of course. I don't know how much you know about Chillingo but the very kind of headline overview of it is we're a part of EA Mobile and we're a division within EA, and our job is to find great indie talent and publish their titles for them.
So we're always looking for that kind of needle in a haystack, diamond in the rough—however you want to phrase it—and always seeking that game. We look for all sorts of games, and whilst our business has definitely migrated toward a free-to-play business, since our revenue is now coming from free-to-play games, we still respect pay-to-download games. We recently launched games like Feed Me Oil 2, In Fear I Trust, and both games received Editor's Choice in the last couple of months from Apple. We'll always respect the game for what it is, and it would have been the wrong thing to do to put those games as free-to-play games.
But with that said, we have to do what's right for the indie developer and for the player.
Who decides what games are free-to-play and what games are pay-to-download?
It's a really complex answer, because our business, we go into partnerships with developers of all sizes, and the developer may have a particular idea that their game fits in one of the certain models, and we've got a lot of experience. And sometimes we can say, "Yeah, we can see you intend your game to be either pay-to-download or free-to-play, but it may actually suit something else." And we always have to have that discussion.
Ultimately it's the developer's IP and we work with them in partnership. We would never force a developer down a particular route. It literally is a partnership, and we have to make sure we do what's right for the player.
Are you more inclined to deal with one business model or the other? Are free-to-play games more profitable right now?
There's no doubt about it—well, profitability is an interesting one. Let's talk about revenue and profitability. I think there's no doubt about it that the money in the market today is made in free-to-play games. We still sign some pay-to-download games and we've still got a few on our road map, but the majority of our titles—probably 95 percent of the titles we will publish in the next 12 to 18 months—are free-to-play.
That's probably a reflection of the shift in the market, but also a reflection of the shift in Chillingo. And I think around 18 months ago we made a conscious decision to change Chilingo as an organization to publish free-to-play titles, and that required a substantial change. It had to go to the heart of the business.
So if you look at Chillingo, we don't just take titles and publish them; we take titles and we work on those games for several months—eight to 12 months, eight to 18 months—before they even go live. So we assign producers, we assign monetization experts, we assign artists to help on the icons and the screenshots and everything. We go into huge amounts of detail and our job is basically to get that game ready for market. With every one of those departments we've had to change the way we think because games have changed.
So to talk about revenue and profitability, I think there's no doubt about it that the revenue in the market today is in free-to-play titles. And from a profitability perspective it's interesting because you have to assign far more resources. So if I look at the biggest IP for Chillingo at the moment, this is a game that launched in 2013, a title called Iron Force, which is a free-to-play player-vs-player tank game. And we've built that title up. If you look at free-to-play titles it's a marathon, not a sprint, and that's the difference between pay-to-download and free-to-play. You have to keep working it, keep driving those daily active users, keep servicing the product, and it requires a lot of effort.
What's the value in choosing to publish games that use a variety of business models? Why do any paid games at all?
Ultimately if you look at Chillingo as a business, we've been around for ten years and we've always been around in the indie space, whether it was advocating or moving into the smartphone world of publishing, and I think we've got a huge amount of developer relations and three to four thousand developers approach us every year. And we're constantly looking for that great title.
The reason why we're not 100 percent free-to-play is because occasionally we see games which we just fall in love with. As an example, we published Icycle: On Thin Ice, a game which launched in November. It was a game that we literally fell in love with. It's so unique. I think it's perhaps one of the most polished games that has ever come out of Chillingo's studios. It's so unique and it captured me as a true testament to what an indie developer can do.
If you think about it, a game like that comes through the door, and it's made by a great guy called Reece Millidge who lives in Brighton in the south of England, and that game comes through our door, how on earth can we say we don't want to publish it? We're proud to publish a game like that.
With juggling so many free-to-play games how do you make sure that Chillingo doesn't have the next Dungeon Keeper on its hands?
Free-to-play's a really difficult world. A lot of core gamers obviously dislike the model. But it's just the way the market shifted. And I think the free-to-play market is a great market. I talk to my 70-year-old mother, who doesn't consider herself a gamer—and she isn't a gamer in its traditional sense—yet she's playing Candy Crush and games like Angry Birds literally for two hours a day. That's more than people play consoles. And it's the same thing with my wife; she says she's not a gamer but she actually plays the usual suspects for hours a day.
And that's the great thing about free-to-play. I think from Chillingo's side the most important thing to us is fun, and that's what we start with. The first thing our producers look at when a game comes through the door is the fun factor: how fun is this game? And we don't hide behind anything else. So we're constantly there: is this fun? Is it a game that in alpha, even in pre-alpha, or early beta, that we actually want on our devices, take home and are playing it, even though it's our job? And it's about getting that balance right.
Do you see a divide in the fan base of Chillingo's games? Are Icycle and Tiny City meant for different audiences?
We've got a huge variety of games, and we're in a very privileged situation that we've got this enormous funnel of literally tens and tens of thousands of developers, whether they're developers we've worked with in the past or new ones coming to us. We have the absolute privilege of choosing those games and hopefully partnering with these developers on content.
And that's why we have an absolutely incredible spectrum of games. You look at games like Modern Command, a game that was editor's choice a month or two ago, that's a kind of mid-core level game. You look at games like Anomaly: Warzone Earth 2, a game that we published in November, I'd say that's a much more core game. And then we go down to titles like The Impossible Line, which is a game we published last year and went to number one pretty much around the world in the free charts. And you could describe that game as a super casual game that's the kind of game that you don't even need to give any instructions for. You just pick it up. So I think we have games at all levels.
We have a cross-promotion tool we call "Pop the Offer." About a year or so ago we launched the new technology. It allows us to cross-promote game. We wanted to kind of gamify cross-promotion. So instead of having banner adverts, if you're seen any Chillingo titles you may see these bubbles appear int he corner of the screen. And you can pull these bubbles out, you can move them around the screen, and bounce them into each other. And if you pop the bubble—hence why we call them "pop the offer"—it takes you to the App Store.
So we're always cross-promoting, and that tool is very powerful for us. And obviously if we've got a game like Iron Force, we want to promote a game which is a similar audience, like Modern Command. But that's why we're always pairing games up where we can.
Do you get more clicks on Pop the Offer ads? Has it been effective?
Yeah, I mean, that promotion tool for us is very, very good. It generates billions of interactions, and very significant double digit kickthrough rates. It's a very important tool. It's extremely effective. And I think it's just refreshing. It's probably reflects the Chillingo team's constant innovation, constantly looking at things. We're very lean and agile, and we can do stuff like this.
Are you seeing more successful games coming out of particular regions?
I don't know many regions that aren't coming out with indie games. We literally partner with developers from all over the world. I would say the next big hit will probably come from somewhere in Asia, like Japan, China or Korea—very important market for us. I would say we've seen a significant shift in the quality coming out of that region over the last 12 months.
I suspect it's going back to the foundation that there was a large MMO business in that region. The developers understand service, and they're offering very strong service-based games naturally. I mentioned Iron Force, our tank game. That's made by a Chinese developer, and it's a great testament.
This was a company—Cool Fish—of about five people. And they've now got 20 people. So they've grown based on the success of their game. Perfect Kick, another title, a penalty soccer game, came from China, and has done extremely well around the world.
Are free-to-play games coming from there actually better than the games coming from Western developers or is the business model just more accepted there because it's been around longer?
I believe there's great quality coming out from all markets. Look, the difference between good and great is significant now. You've got good games everywhere. To discover great games is very tough, and there is a very big difference. You will always get the odd indie developer that breaks through and has some great success, but I think what we're seeing coming out of China is really experience that other people haven't got as much of.
So as an example if you look at the foundations, you need a great game, you need strong monetization, and around it a lot of service capabilities. And while people may have great experience in some regions at making great games and certain experience in monetization, maybe less so in the service side of things.
There are a lot of games coming out in Asian regions that don't necessarily gain as much of a foothold here. Is effective localization something that Chillingo wants to tackle?
Yeah, it's something that we're constantly reviewing. We're very conscious of it. At the moment I would say the majority of our games are suitable for a global audience. At the moment we haven't had a particular title that has performed only in one particular region.
And that's probably not a comment about, let's say, China, or Japan, or Korea, but Russia, America, whatever—I don't think we've had a title that only resonates in one market.
Why do you think that is?
I believe we're very strong at what we do, which is identifying that needle in a haystack. Going back to the comment I mentioned earlier, we're passionate about games and we identify fun. And fun's pretty universal.
But I think if we take fun as the foundation and our experience on what sells, what doesn't sell, what's commercially appealing to consumers, I think that takes us far.
How many games do you publish a year?
It's a very good question. The number of games we've published has gone down considerably, and that's a very conscious effort.
A couple of years ago we published a huge amount of titles, and they were pay to download titles, and they weren't service-based, which meant you launched, then you went on. If the free-to-play model was a marathon, then pay-to-download was pretty much a sprint, more in line with other kinds of entertainment. That first month was extremely important.
I think in terms of where we are today, we're probably publishing this year in the region of 40 games, which is probably a couple of hundred down from where we used to be.
Because you're getting better at identifying "the needle in the haystack"?
I think actually the reason for that is our business has become a live service organization. So if you look at it, our biggest release of this year has probably already launched.
If I look at a game like Iron Force, that game came out in June. We soft-launched in June and we had a global launch a couple of months later. That game, the revenues are probably two to three hundred percent higher today than where they were last year. And they're continuing to climb. And when you apply these rules to these kinds of games, you need to be able to focus on it. And hence the reduced road map.
Would you say also a greater percentage of your games now are successful compared to before?
Yeah, we made a conscious decision to reduce our road map because we're making more revenue per game than we were a few years ago. We know that from our numbers. And the difficult thing in the market is that we're having to reject good games with this structure.
You asked the question about identifying the needle in the haystack. We've never had a Harry Potter or Star Wars moment where we've gone and rejected that game which has gone on to be something enormous. Will that moment come? Possibly. It's very subjective. But as of today we've never had that moment. Fingers crossed we don't.
It's difficult because we've got a lot of experienc. And unfortunately once upon a time a great game could have been enough with great publishing. But now you need a great game and publishing, but you need to be able to monetize it. And that's where a lot of developers are struggling. What we do have is the experience to help steer that some of the time. Some of the time it's too late, and we can't enter into a partnership.
Do you see that as a negative development?
I wouldn't say it's "negative." I think the whole shift to live services is positive for the market, and free-to-play—I look at it from a player's perspective.
And these people, whether it's young children or my mother—it doesn't matter who it is, it doesn't matter what demographic it is—ultimately they've got a live service. And in the majority of cases, free means free. What a great position! So I don't see that shift as a negative. I think it can be a positive if it's respectfully done.