Cie Games Founder Justin Choi: Execution Key On Facebook’s Gaming Platform

By David Cohen 

Cie Games, developer of Facebook auto-racing game Car Town, has been able to swerve around the debris left on the track by game developers struggling with the social network, such as CrowdStar, LOLApps, and Digital Chocolate, driving its flagship game to continued success and some 5.9 million monthly average users. The key, according to Founder Justin Choi: Better execution.

Choi’s message about the viability of the Facebook platform for game developers is simple: You can be an independent game developer, have a game, acquire users without breaking the bank, and achieve a profit. You can acquire users on the platform. You can still leverage Facebook virality. You can find success on the Facebook platform — it just takes sharper execution that it did in 2010 and 2011. Today, fewer than 10 percent of new users are paid installs. That number was much higher in 2011.

Choi spoke about the early days of Car Town, which launched in late 2010, and the differences in the Facebook gaming business between then and now:

He said that when Cie Games first launched Car Town in late 2010, it didn’t know how well the game would do, adding that social game companies really focused on audience size and spent aggressively on advertising in 2010 and 2011 trying to scale their games. So Cie Games was spending more on advertising and growing Car Town with assumptions about eventual profitability that turned out to be wrong. With better analytics that let the company access user data faster, it can make better decisions about user acquisition.

When Facebook required all developers to use Facebook Credits starting July 1, 2011, and to share 30 percent of their revenues from Facebook games with the social network, it shook up the industry. Choi spoke about how it affected Cie Games and Car Town, saying that the shift to Facebook Credits made execution much more important.

When Facebook Credits were introduced, there was a slight lift in revenue, and he initially thought the shift to Facebook Credits wouldn’t be too harmful, but that turned out not to be the case. The initial “lift” was from the fact that the Facebook Credits buttons in the game were new, so they benefited from being highly visible to the game players. The initial surge of conversions didn’t hold, and there was a big decline in monetization in the weeks following the change to Facebook Credits. This was the low point for Cie Games and many other social game companies.

One major issue was the fact that the company didn’t get to retain all of the offer revenue like it had before the conversion to Facebook Credits. Since users redeemed offers for Facebook Credits instead of Car Town’s in-game currency, offer revenue took a big hit. Facebook corrected this and many other issues over time. This, in conjunction with better execution and use of analytics, helped the developer achieve record revenues in 2012 even after factoring in Facebook’s 30 percent cut.

Facebook analytics are constantly evolving, and Choi said there is more intelligence out there today in terms of game metrics, mechanics, and analytics platforms, adding that when Cie Games started, it had to build out its own analytics system and learn everything as it went along. Because of this, the developer wasted a lot of money on its Facebook ad spend in the first few months of the game’s launch, and Choi added that he suspects this is something that many independent social games wrestled with.  Better analytics, combined with better understanding of what its users want and what mechanics work, helped the company make Car Town highly profitable.

Cie Games has reached in-game advertising deals, including a tie-in with the launch of the then-new line of the Toyota Prius in early 2011, and the company said it booked more than $5 million in brand integration in 2011, including a single deal worth $1 million. Choi offered more details, saying that the focus has shifted from game integration to incented videos, and there are now multiple companies providing pay-per-view video inventory, accounting for 10 percent of the company’s monetization. That said, there will still be brand integration deals, with some major partnerships to be announced in the coming months.

Even with the revenue from advertising, Cie Games still makes the vast majority of its money from virtual goods sales.

On parking all of its cars in the Car Town garage, so to speak, and constantly adding new features to Car Town rather than rolling out new games, Choi said:

By having frequent updates and continuously improving this game, we’ve really been able to improve retention. We have players who have been playing this game for a long time.

We really want to build a franchise, and we think that’s harder that just building a good game — to have a franchise that works across platforms and not just on Facebook. We want Car Town to be an enduring franchise.

Choi said the future will bring “some big announcements,” including the launch of games in other genres, as well as mobile games, adding:

There’s still a lot more in store for Car Town. We didn’t just want to rush into mobile because we wanted to build a great game. We’ve been applying all that we’ve learned in the past year-and-a-half into the multiple titles we will be launching this year.