To be or not to be an app…the tradeoffs of building on-Facebook vs off-Facebook

This blog post comes out of a Q&A thread at Quora, a cool new startup that’s all about sharing knowledge. Awesomely, hanging out on Quora is spurring a renewed interest in writing, mostly because Quora is super social and I like riffing on ideas with other people.

The question was: What are some of the cost/benefits associated with building an app in Facebook vs building a standalone site?

So at ohai! we are supporting both on-Facebook and off-Facebook experiences. We’re seeing some interesting data so far with our first MMO, City of Eternals. When people play embedded through Facebook, their usage pattern looks something like this: 5-6 minute sessions about 8-10 times a day. So they are round tripping in and out of the game world many times a day. When people play directly at the City of Eternals site, they’ll play for 20+ minute sessions 2-3 times a day.

Here’s a screenshot of the embedded, in-canvas Facebook experience:
(click through to see the larger image)

Here are screenshots of the standalone experience at CityofEternals.com:

We’re doing a few things differently in the on-boarding between the embedded app and the CityofEternals.com experience, but I don’t believe they are sufficient to explain the entirety of the difference.  There are a few different hypotheses that might explain these differences more thoroughly:

• The standalone site has a theoretically better playing experience, since it’s full screen; The full screen experience leads to different types of behavioral patterns in game.

  (For example: Players might be more likely to partake in longer missions, Players might be more likely to join groups and do group activities, Players might be more likely to participate in exploratory vs discrete goal oriented behaviors, etc.)

• The full screen experience has fewer distractions, leading to a different type of relationship between user and product.

  (For example: Players might be more likely to become citizens[1] of the world we’ve built, rather than just tourists, who come in and out to complete short, discrete tasks.)

• However, you can’t discount the ‘form’ factor of being very proximate to the social context where people already naturally live, which provides benefits around higher conversion rates / lower barriers to entry

  (For example: Facebook has done an amazing job of building a site that people log into religiously – daily, multiple times per day – it’s easier to attach a new service to that existing behavior than to ask users to form a new daily relationship with a new behavior – such as going to CityofEternals.com and logging in.

  Whenever you ask someone to learn a new daily behavior, the initial pitch better be compelling – to entice people to even try it, and then the value they receive in the first 60 seconds better be outstanding, to convince them that they want to try again.  Every single second in your service is a new potential conversion point.  Whereas on Facebook, the value proposition for logging in every day and returning has already been well established.)

• People are used to playing other social games in quick bursts multiple times per day, so that’s the mindset with which they approach embedded games to begin with.

  Again, back to the principle that it’s easier to draft off of existing, established behaviors than it is to forge new ones.  (Have you tried training your cat lately?)

We’re still in our early beta days, so we’ll be collecting a lot more data to test these hypotheses over time.

Then there are the cost/benefits around business related issues:

• The standalone site has a better chance of building a strong brand relationship with customers

• With a standalone site you have more control over the user experience

• With a standalone site you have to deal with a conversion rate hit of the first ‘try’

• With a standalone site you have less optimal access to user communication flows that are already prevalent in the on-Facebook experience.

• With a standalone site, you may be subjected to less volatility in your base platform (since the Facebook APIs have some external volatility that you can’t control)

• With a standalone site, you’re going to have to work harder at facilitating daily usage patterns

[1] Citizen (noun): I use the word citizen a lot when talking about the social web. A citizen is someone who is deeply engaged; someone who has a strong emotional connection with the community and the social software they’re participating in.  Someone who is invested in the health, stability and future of the service they’re using.  There are different levels of citizenship – some may be passive participants, some may become active policy makers.  But the hallmark is some level of emotional identification with the community and environment. Our goal is to turn our users into citizens.

Tags: city of eternals, facebook, facebook connect, games, massively multiplayer online games, mmos, ohai, social games

CRV and GDC partner to revolutionize gaming industry

We at CRV are producing a new program at GDC called Startup Launchpad.  Essentially, it’s a way for game developers - indie to amateur to professionals within studios - to learn how to become entrepreneurs and to become unshackled from the confines of the traditional game industry structure.

 As I’m sure many of you know, many game developers/designers toil long and hard for game studios, only to receive very little if any equity for their efforts.  It’s an inequitable system.  I was an indie game developer for many years (MUDs, Mods) but I never wanted to join the traditional studio system because of what I perceived to be very inefficient employee management practices.

 The gaming industry is at the cusp of major structural change.  Traditional retail channels have left industry power in the hands of the few who could create scale to distribute across retail efficiently.  Now with the advent of open platforms such as such as XBL/XNA and web platforms like Kongregate, MiniClip, Areae/Metaplace, Facebook, etc, there will soon be numerous channels for game devs/designers to leverage to help them build their own profitable businesses.  And also, as players become more accustomed to playing games online or purchasing via online channels, there will be more venues for building new platforms and experimenting with different business models.  More importantly, many of these new games that will emerge will be much more lightweight social games, and so entirely new genres of gameplay will emerge. 

Bottom line: the gaming industry is at the cusp of dramatic structural overhaul in the next several years.  Some of this innovation will be driven by the large game companies (XBL, EA Blueprint), but I expect a bulk of the exciting new developments to come from a crop of startups yet to emerge. 
Anyways, I am hoping that these series of events at GDC will foster innovation, creativity, and a sense of what’s possible in the gaming industry.  At the very least, I want to introduce game industry folks to the possibility of being an entrepreneur or working for a startup.
You can read more about these events at GDC Director Jamil Moledina’s blog:
http://www.gdconf.com/news/directors_cut/

or at Gamasutra:
http://www.gamasutra.com/php-bin/news_index.php?story=17370
 

The first series of events takes place tomorrow, Friday February 22 – you can read about the 3 Startup Launchpad sessions here.

• Raising Venture Financing for your Startup: Tips, Tricks, and Hacks – 9:00-10:00am Room 2004 West Hall
• The 1st Annual Startup Showcase – See the 5 most exciting and innovative startups of the year – 12:00-1:00pm, Room 132 North Hall
• Lessons from the Front Lines: Startup CEOs share their insider stories – 4:00-5:00pm Room 2007 West Hall

Thanks for reading! I hope to see you there. And keep a lookout for the business plan contest we will be launching for Austin GDC in the next couple of months.

Interview with Worlds in Motion

Leigh Alexander, who is one of my favorite writers on the subject of virtual worlds, interviewed me about the future of online gaming.

The whole thing is worth a read – it turns out it’s a lot easier to speak casually with someone than to blog (surprise!).  In it, I talk about one of the holy grails of online gaming:

“One of the hallmarks of a successful Web company is — if you look at the track record of the most successful companies that have stayed independent and sustainable, like eBay, Google or Amazon — they have built platforms [which can] foster entrepreneurs. There are ecosystems that spawn innovation from the community members themselves, and Facebook is falling in with that too, with the new platform launch. Few gaming people understand this intuitively — though, Xbox Live Arcade really fosters an entrepreneurial ecosystem, too. That’s something Areae is trying to focus on – how to build an actual ecosystem and a real, [open] web platform for people to [work, build, and extend upon].” 

Introducing Conduit Labs

We just announced our recent Series A investment in Conduit Labs, a Boston based company that’s focused on building a social networking / casual MMO hybrid.  Well, what does that exactly mean? And aren’t there a hundred companies now doing this exact same thing? 

This new space – the intersection of Web 2.0 and online gaming – is a very difficult one to define.  This categorization encompasses companies like Kongregate to Areae to Three Rings – each of whom is vastly different from the others.  To make it even more confusing, Conduit Labs is not really like any of the three companies I just mentioned.  They’re inventing an entirely different interpretation of what it means to sit at this intersection. 

Conduit Labs is building a gaming environment.  That is to say, the primary driver of user interaction is game mechanics.  This gaming environment lives in an immersive, graphically rich world.  But the gameplay Conduit Labs is building isn’t exactly like other online games we’ve all now become familiar with: there’s probably not going to be much kart racing or princess saving or dragon slaying.  We aren’t yet disclosing what the gameplay or graphical metaphor will consist of, because that’s part of the secret sauce. 

Leigh Alexander from Worlds In Motion wrote up a great interview with Nabeel that provides more insight into what Conduit Labs is up to.

Nabeel: “I think probably every other day now over the last couple months, I see a new casual MMO or virtual world startup; it’s been constant…and what I saw was the same kind of dichotomy — two types of startups. There’re hardcore MMO gaming guys trying to make that experience more accessible, sort of like World of Warcraft meets the web. And the other side of the coin is a bunch of web guys who want to build a web site with virtual gifting and more gaming.”

While Hyatt recognizes the value in both of those approaches, he adds, “I think they’re missing the larger point – which is that there is no interaction on the web that is like a social game. I don’t mean a single-player game, which is based on a legacy of, really, only video games; it doesn’t last hundreds of years. There’re actually thousands of years of games that are primarily social activities like dancing, or bowling. And those are about you bonding with your friends, and there’s nothing like that online right now. And I think the web and social networks provide a whole new medium to create something that’s never been seen before.”

Just like the Wii and Guitar Hero reinvented the social gaming metaphor for a broader audience, Conduit Labs is trying to do the same for your web gaming experience.  I’ve also seen innumerable business plans in the last year for startups in the online gaming and virtual world space.  But most of them have been rehashes of things we’ve already seen, building things like “making the MMO even more casual” or “putting casual games into Facebook” or “Club Penguin but with chimpanzees.”  (disclaimer: I actually like chimpanzees quite a bit, probably more than I like penguins.) 

We invested in Conduit Labs because I believe the team there really gets it: there’s an entirely new type of immersive experience waiting to be built.  It has less to do with technology (although we are building on the basic assumptions/principles of the zero-barrier MMO and all that entails), and more to do with social engineering.  This is a great team that has the right blend of experience that includes Web 2.0, hardcore MMOs and the scalability expertise that comes from supporting tens of thousands of concurrent users, and understanding how to design “fun” for a mass market audience that comes from building groundbreaking social games like Guitar Hero.