Ex-Playdom Exec Rick Thompson Calls for Higher Quality Social Games

Rick Thompson has lived and breathed social games for the past five years, first getting his feet wet by co-founding Playdom, which was sold to Disney in 2010, and now through a series of investments and start-ups.

In that time, he says, the nascent industry has gone through a radical transformation.

Disney’s recent struggles with finding its way since the $532 million acquisition is a case in point, but Thompson says it is a general trend that is affecting everyone in the space as the bar for producing better and more engaging games gets raised. [More on Disney’s current plans for Playdom in a separate story today.]

Today, since leaving Playdom last August, Thompson remains active by helping to start and fund around a half a dozen new social games start-ups.

Here’s an edited version of our conversation:

Q: When did you leave Playdom?

Thompson: At the time of acquisition. I was chairman. And, then the next day, I wasn’t.

Q: What are you doing now?

Thompson: I am helping develop exciting opportunities in social and mobile.

My thesis is that the rules are different now than they were back in 2008 to 2009. Back in those days, the viral channels were wide open, and lots of folks were competing. The reality is that the best companies at exploiting the channels — those companies, which had their DNA in Web marketing — were the ones who had the winning strategy.

Then, of course, there was the over-exploitation of those channels, which led them [Facebook] to dial them back, so that they were inaccessible by all. It got rid of the noise and the signal. These communication channels were largely app to user, they weren’t user to user.

When the rules changed, they changed radically, but they also changed slowly. They slowly turned the valve, so some companies rather than reinvent themselves, tried to apply band-aids to 1,000 cuts that were coming.

Here we are now in 2011, with the viral channels greatly reduced. And, some are still executing against the playbook that was used in 2008 and 2009.

Q: What do you think about Facebook’s latest moves to reopen the viral channels?

Thompson: They did the right thing by clamping down on spam and it has taken them awhile for them to let through the signal through again.

They’ve invested heavily, by hiring 40 to 60 people, who are focused on maximizing Facebook revenue through games. The overarching trend is toward Facebook building an environment, where users who want to share apps with each other, will make it easy for that to occur. Things that don’t have natural virality will suffer.

Q: Is natural virality really possible?

Thompson: It’s interesting, within mobile, we’ve had some really outstanding successes, such as Angry Birds and Cut the Rope. We haven’t seen that on Facebook. That’s ironic, I think that user-to-user communications are alive and well when the noise gets cut out.

I think developers are having to retire old practices and will have to provide experiences that people do enjoy and then I think Facebook will make it easier.

Q: So, you think mobile can be more viral than Facebook?

Thompson: Yes, if you go back to the classics. If you are standing in line and playing a game and laugh and pass along what you are doing to the person next to you, that’s how the really great games are being passed in mobile. It’s a general virality. It’s not spam-driven. Mobile is more viral than Facebook.

Q: Do you find very many Facebook games enjoyable?

Thompson: I think they are fairly scarce. I think there’s Backyard Monsters, which is a terrific niche game that appeals to the player and provides a great experience. Gardens of Time [made by Playdom], is also a well-done game that appeals to a certain audience.

But what I am saying is that the bar is being raised and the established players are having a harder time reacting to the environment, and it’s hard to let go of that. The innovation is coming from emerging players, like Electronic Arts. The Sims Social is a terrific example and it came out of nowhere. Personally, I’m drawing lots of inspiration from it.

Q: What are your investments focused on?:

Thompson: Through the investments I’m making, the overarching theme is about quality and games that people want to share. That’s the new playbook and some of the investments I have made, like in Funzio, is innovating on Crime City on Facebook and now taking a multi-platform strategy to iOS.

Q: So, how do you feel about the farming mechanic that has become so standard on Facebook. Is that here to stay?

Thompson: I tend to think that those will not be very interesting in another two years, and they aren’t social games. They are single-player games with the possibility of visiting your friend’s aquarium — that’s not social.

In addition to quality, I’m excited about making advancements on a number of fronts, where companies are each developing unique capabilities and competences. Kabam [which is making social games for hardcore game players] is in a similar camp. I think that’s really viable and it’s a niche strategy.

Q: Should we expect that social games will commonly attract 100 million daily active users, such as CityVille?:

Thompson: That’s a very ambitious goal. I think that requires a big investment and commitment. It’s a big effort. The big mega-hits are likely going to involve a strong creative team with a vision and a production team and a large budget. It’s not inconceivable that in two to three years, it will look like the console business.

Q: How else has the business changed?:

Thompson: The philosophy of shipping a product has also changed. Users used to be free and infinite, so you would ship a minimal viable product, and as long as it worked for a enough people, it was good enough and you would iterate later.

Now, when users are expensive and it costs $2 to $3 to acquire each one, you don’t want to squander those users. The maturity of the products is way beyond what we saw two years ago. Rather than releasing after six months months of development, essentially you’ll have an extra 12 months of development and have beta customers.

Q: You seem to look down on companies that are driven by analytics, why?

Thompson: Analytics is important, but should it be what is it that’s driving the bus? Or should it be the creative vision and passion for creating a game? We put creative and the vision as driving the bus and put analytics in the back seat, making sure we are doing the right thing and are catching any problems. But it doesn’t lead.

Q: What happens if it leads?

Thompson: I think it leads to bad consumer experiences. The classic problem is if our goal is to increase virality, and my team says lets do a test whether adding an extra prompt to invite your friends, leads to virality, and it does. Then, maybe you add a second or third. To me, it’s not where you want to be.

Q: What are some of the things you are invested in?

Thompson: Wild Needle, Rumble Entertainment, Funzio, Red Robot Labs, Project Slice, Airy Labs, Noise Toys, Viki, SocialShield, Udemy, Triangulate, Idle Games and AdChina.

I have supported some efforts through my friends or things that are so compelling. It’s a fascinating space to be a part of.

Q: What platforms are you interested in?

Thompson: I’m bullish on Facebook, and mobile is a real threat and Google+ is a threat. I am excited about mobile and Google+ for the simple fact that developers have choices. I know a number of developers, who are now emphasizing mobile. As the quality game developers go to mobile. The more successful Steve Jobs is, the harder Mark Zuckerberg will work to get them back on Facebook.

Q: Do you think that the 30 percent cut that Apple and Facebook takes will fall?

Thompson: I would think it comes down overtime. Competition will force it. I think it would increase the market if they cut it. Someone has to give.

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