Gaming Lite: PopCap Games Rides High on a Lark

Electronic Gaming Business, June 18, 2003

Talking to the folks at PopCap Games, you'd think that making hit casual games like their ubiquitous Diamond Mine (aka Bejeweled) somehow came easy to the Seattle firm. "Most of it comes down to four letters...L-U-C-K," says director of business development Don Walters. Whatever it is (and we doubt that it is luck alone), it has struck again, because the February release of the downloadable word puzzle title Bookworm Deluxe is actually selling at a much faster rate than had Bejeweled when it arrived in early 2001. "For now, it is the biggest revenue driver for us," says Walters.

Unlike the four- to six-week shelf life of most titles at retail, feebased downloadables like Bookworm enjoy much greater longevity. Six months after launch, it remains one of the most popular downloads on RealNetworks' RealArcade network, and at any given moment of the day more than 8,000 people are playing the Web version of the game on Yahoo! Games.

Walters attributes the accelerated success of Bookworm to a much more mature distribution model and learning the lessons of bringing Bejeweled to market two years ago. The brainchild of company founders John Vechey, Brian Fiete and Jason Kapalka, Bejeweled started life as most PopCap games do, as a simple puzzle or arcade challenge designed to be played within a Web browser. Back in 2000-2001, the concept dovetailed well with the business models at major games portals like MSN's Zone, ShockWave and RealArcade, where these publishers were trying to generate ad revenue off of massive traffic to free games they licensed from companies like the fledgling PopCap.

Initially distributed only via the MSN Zone in late 2000, Bejeweled proved popular, but the decision to create an upgraded standalone downloadable version for sale in early 2001 "was more of a lark," Walters says. The timing of this lark proved lucrative, because at just that moment the Web bubble was bursting, along with portal dreams of advertising support. "They had to figure out a way to make revenue," he says, and sharing revenue on fee-based downloads like Bejeweled Deluxe was an irresistible proposition. And so, a new model was born: develop a spartan version of a casual game title for browser play, and once the market responds to a given title offer a downloadable version with better graphics and sound for $19.95.

Distribution Is Everything

Despite its outrageous online popularity (Walters guesstimates that it sold over 500,000 copies) Bejeweled did not make nearly the same splash when PopCap turned to Global Star Software to publish and distribute the title in the retail channel. "Mostly that's because with the Web version people can have a taste of the game," says Walters. Up against high profile titles on the shelf in hardcore gaming genres, and with little marketing behind it, a casual game has no opportunity to make itself known. PopCap does have some downloadables selling without the benefit of a playable Web version, but the conversion rates on these tend to be lower. Being able to pick up a casual title within the browser window offers gamers a very low barrier to entry that does a better job of prequalifying likely buyers of the downloadable trial version.

Online distribution has much higher margins than retail as well, says Walters, even though entertainment portals like RealArcade and Yahoo have been known to demand up to 60% of a title's revenue for the privilege of carrying it on their networks. In PopCap's case "we do better than that because we have proven titles that sell well, and we're large enough that we can consistently put out product. There's less unpredictability with us," he says.

Unlike Bejeweled, which dribbled slowly onto the major game portals, Bookworm hit with a noticeable splash in February, as it launched on all of the major gaming sites within a three-week window. Walters thinks this more coordinated push is mostly responsible for it selling at a faster clip than the previous hit. "We will have to wait and see if Bookworm has the long legs that Bejeweled still has," he says.

Having grown to 20 employees since the success of Bejeweled, and with 11 titles in distribution, PopCap has leveraged the online distribution model to keep costs low. It invests little of its own cash into marketing, because there is a natural, market-driven promotion that occurs at the major distribution channels: the popular titles that convert best to sales bubble to the top of the title list and gather greater attention. In fact, while other casual game developers will gripe about getting better placement and promotion on their distribution sites, Walters feels "It's hard to make demands. If you have a title that isn't going to sell well, and you know it isn't going to sell well, forcing a distributor to make unnecessary marketing commitments doesn't do any of you any good."

And even PopCap has games that don't sell well. While most are profitable, Bookworm and Bejeweled are the big performers for the company. Underperformers such as Seven Seas and Mummy's Maze failed to grab a large audience for the company, probably because they just asked the audience to think too hard. In order to make a major impression on the market, these games need to effect a careful balance between challenge and a kind of Zen-like flow, what Walters calls "more like an arcade puzzle game."