Digital Chocolate Makes Big Move on Facebook with NanoStar Castles Launch

Digital Chocolate has been building games since 2003, but it has mostly focused on mobile and PC desktop platforms — until it decided to focus on Facebook, last fall. Having launched four games on the platform already, the company is now planning a big new concept called NanoStar, starting with a game launching tonight called NanoStar Castles.

Big picture, the company is already seeing some good traffic results from its Facebook efforts so far and, if everything continues as planned, the company has a better-than-average shot at becoming a social gaming market leader this year. More on that, further down.

The NanoStar concept is not straightforward to explain, but it’s intuitive when you see it in action. The idea is to create characters that players can purchase and then use across games, with the character getting special abilities depending on the game. Characters can be unlocked in various games or bought in packs, and traded.

This is in contrast to buying virtual goods like seeds for a virtual farm or food for fish in a virtual aquarium, as Digital Chocolate founder Trip Hawkins tells us. The relationship players develop with character-driven virtual goods in new contexts over time will make the investment — and Nanostar — more valuable.

NanoStar Castles is the first game to show the concept off. Based on a standard deck of 52 cards, you and an opponent take turns drawing cards and trying to obtain the highest score by the time the 10-round game ends. Each player has four cards, graphically displayed behind a virtual castle wall. The front two cards are face-up, and viewable to both players, while the back two cards are face-down and hidden from view. In addition, each player draws a “Noble” at the beginning of each hand — essentially, a separate deck of cards that can be used to modify the main deck. These characters come with a wide range of special abilities that can affect the outcome of the game, like stealing the other player’s cards, blocking them, giving your own cards a boost, etc. Players continue drawing cards and battling each other with Nobles until the game concludes, and points — based on the card ranks from the final decks — are tallied.

We’ll save the rest of the game’s many details for a full review, but here’s an example of how the NanoStar concept comes in to play. The company has a long-standing title called “Crazy Penguin Catapult,” available on desktop and mobile devices, that has players fending off polar bears by using a catapult to shoot penguins at them. The penguin character from the game is a “Noble” in Castles. Players who draw the card can use it to remove Nobles from the other player’s hand, an action complemented by a penguin-catapult animation.

Hawkins, who among other experiences founded gaming giant Electronic Arts, tells us Castles concept has a diverse range of inspirations, from classic card games like Texas Hold’Em poker, to Pokemon, to Magic: The Gathering. Poker combines luck, strategy and communal play. Magic goes further, as its players spend hundreds of dollars collecting more powerful characters and decks — each additional purchase adds perceived value to what they’ve already bought. And as Pokemon showed, both kids and adults are willing to pay good money for digital pets, in the right circumstances.

As Zynga’s Texas Hold’Em has shown, poker is one of the few games to have stayed popular this long on the platform. If Castles can get a strong core audience, it will likely be around for awhile, too. While most social game developers have been focusing on building simulations in the last year or so, Zynga and Playfish are intriguingly the only other good-sized developers we know of besides Digital Chocolate to launch a social card game in recent months. Playfish launched a stylized poker game, Poker Rivals, last December. Zynga launched a stripped-down version of hold’em, called Poker Blitz, just last week. Those companies are apparently thinking about the long-term potential of card games, too.

Meanwhile, Digital Chocolate has a second game planned, called NanoStar Siege, that will further build on the NanoStar effort. It’s scheduled for launch tomorrow, and patterned after the Tower Defense genre — but with offensive capabilities. As Hawkins recently wrote in his company blog, “the penguin turns into a unit called Bandits that unleashes a group of Skirmishers at any spot on the battlefield that you choose, as if they parachuted in … no, I guess they probably got there by catapult!” We’ll be covering it shortly, as well. And, expect many more NanoStar-themed games to hit Facebook this coming year. Eventually, Hawkins also says that the company will bring them to the iPhone as well.

Digital Chocolate’s Shot at Social Gaming

But hold on. Lots of ambitious gaming veterans have been trying their hands at building social games, and struggling. What is Digital Chocolate going to do to make its big plan work? Whatever it’s doing seems to be working alright so far.

So far, it has launched MMA Pro Fighter, Tower Bloxx, NanoTowns and Safari Kingdom. None have been breakout successes, but they all have a decent number of monthly active users (MAU) and daily active users (DAU). Growth on both counts has been looking good in the past month, with MAU climbing from 566,000 nearly a month ago to 1.49 million today, and DAU going from 37,000 then to 153,000 today, according to our independent AppData analytics service. We don’t have a perfect window into why growth is happening, but it appears to be because people enjoy the games enough to share them — rather than spamming them. We’ve reviewed three of the games so far — role-playing game MMA Pro Figher, city builder NanoTowns and animal-raiser Safari Kingdom — and all favorably. Of course, the games also have gotten a little boost from Facebook advertising.

The short-term growth of Digital Chocolate’s Facebook games is encouraging; Hawkins points out that the games are some of the fastest-growing ones among social game publishers building around virtual goods. But there are particular questions around Castles. Explaining a new card game is never simple, although the game’s tutorial seems pretty straightforward. Gamers who are not familiar with Digital Chocolate’s existing games portfolio might not care about all the tie-ins with its existing characters. And, Digital Chocolate doesn’t have tens of millions of users on Facebook that it can instantly cross-promote the new title to.

However, the company is set for the long haul of social game development. It has raised $44 million to date, and Hawkins tells us that it has been profitable for a couple years already by syndicating its many other games across other platforms. It currently has around 400 employees spread out in studios around the world, half of whom are now focused on building Facebook games. Beyond its unique catalog of games, it also has a number of patents, including one for the cross-game character cards system used in NanoStar. So even if Castles doesn’t take off right away, the company has all sorts of resources it can bring to bear to keep tweaking it until it works. By getting NanoStar off the ground now, it can continue tying in existing and new games into the system, and start realizing the benefits of the concept.

In sum, the company is making the right sorts of experiments on Facebook, and it has the experience and resources to persevere until it figures out exactly what works. Despite many short-term questions, we think it has special potential to be a big success.