Industry Perspectives: Trends in Social Gaming Platforms with Playfish COO Sebastien de Halleux

By this point, most people with an eye on the social gaming space know Playfish. The company, one of the top developers of innovative free-to-play social games on Facebook, MySpace, Bebo, and the iPhone, now has offices in London, Beijing, San Francisco, and Tromso, Norway. In addition, the company says it is profitable.

Now that the cat is out of the bag in terms of the size of the Facebook Platform transactions market, more and more companies have set their sights on Playfish even as the market is just starting to mature. We recently sat down with Sebastien de Halleux, co-founder and COO of Playfish, to get his thoughts on current dynamics in the space.

Justin Smith: Thanks for joining us, Sebastien. How does Playfish think about its platform strategy?

Sebastien de Halleux: Since the old days, the gaming model has always been attract users to where you are – first to shops, then to game portals through SEM and SEO and other marketing efforts. For the first time, with social games you can take a different approach and bring games to where people are.  It really means bringing the games to multiple communities, like Facebook, MySpace, the iPhone, and Bebo. For the first time, users don’t come to us – we go to them – you can call that “widgetized” games or whatever you want.

Our approach has always been to start on Facebook due to the growth and maturity of the channel and its clean and well-defined user experience. Since then, we have expanded to a number of other platforms, including MySpace, Bebo, Yahoo, iPhone, iGoogle.  We are tailoring our products for the different communities, i.e. customizing it for the viral channels on each. However, because we are a Flash based company, the transition for us from one environment to another has been easier.

Some communities (like Facebook) are very forthcoming with applications stats, but others aren’t. We see no reason why this information should not be accessible to everyone.

Do you think players will become more loyal to games instead of platforms?

Yes, and it’s very interesting because many games are very important in attracting new users to the platform. If you Google Playfish, you’ll notice that Playfish is mentioned on many, many blogs outside Facebook or MySpace recruiting friends to play on Facebook or MySpace.  People see the game as the activity they want to be involved in, which is very much in line with what Facebook is trying to do.

In addition, we have done a Facebook Connect integration on Pet Society, and some users like to use it because it runs in a small frame and is easier to find.  We have contests where players are submitting pictures of themselves holding Playfish signs, and the entries are flooding in.

Recently, Facebook launched chat invites, a feature largely requested by the social gaming community. Do you think platforms like Facebook are likely to coninue to add features to their platforms due to game developer requests?

This is also very interesting, because typically platforms are born independently. The console is the console, and as the developer you try to push it to the limits. Here, the platform is software, and yes there is tremendous indication that the platforms are listening to the needs of the developers and adjusting the direction of the platforms.  I cannot think of one platform that is not doing this.

The game content has become so popular, and games are pushing innovation to the limit and moving the plafforms forward. On Facebook, whether that’s chat invites or sharing or other services, game developers are showing the need for new APIs that will be valuable for the whole ecosystem and other platform applications.

Since the beginning, Playfish has bet pretty heavily technically on Flash. Why did you do that?

Part of this is heritage.  We have been using Flash for a very long time.  Flash allows for a rich and compelling experience, and we decided that we wanted to really polish the experience and make it as interactive and visually appealing as possible given the constraints.  We have always tried to push very hard in terms of making our games socially compelling as well as technically innovative.  There are actually quite a lot of small innovations in balancing what we’re doing in Flash with the constraints of lower end PCs and other platforms – like touch screen devices like the iPhone. We’ve designed our games with all of this in mind from the beginning.

One of the reasons we went with Flash because we wanted to make the game experience as approachable as possible.  Most of the games on free to play Flash portals require a client download, and some of them are huge. We wanted to make this much simpler and create something Wii-like and visually compelling.  With ActionScript3, it was a natural choice.

Finally, it makes transitioning from one platform to another easy. Most of the tweaking happens on the server side, so we don’t have to worry as much about the platform that we’re designing the client for so we can focus on the quality of the game.

There is an art to creating a game in a full screen environment, but unfortunately most PCs cannot handle high frame rate at full screen in Flash.  We’ve spent a lot of time trying to be innovative around quality by coming up with ways that make you feel like you are emotionally connected during game play.

Recently, Facebook confirmed to Inside Facebook that it is starting to test integrating its virtual currency, Facebook credits, with Platform applications. Do you think it makes sense for Facebook to be the one handling currency payments in the long run?

We think that the payment layer is going to be one of the defining enablers in making this industry a success.  We think the entire industry is at stake when solving the payment questions. There are two factors: geographic coverage and friction.

In terms of geographic coverage, typically e-commerce has only been optimized for high ticket items and geographies – the US and western Europe. Now, virtual items create demand for much lower priced items around the globe in places like southeast Asia, where happily spend money for virtual items. However, the payment solutions in those geogrpahies are fragemented at best. Typically, in the past early innovators have had to integrate hundreds of payment methods who are reinventing the wheel, but many fail.  We think that solving that problem is where the platform has unique advantages of scale.

In terms of friction, the best practices have been set by Apple and Amazon in terms of 1-click payments, which is really best done at the platform level. There, you can use any single emotional trigger to gain the user’s trust, and then use that trust in a variety of future scenarios.  At that point, the platform has the opportunity to give you 1-click payments in a variety of scenarios.  I’m not sure you can beat the platforms in terms of payment friction.

Overall, we are working closely with platforms on these kinds of problems. Our team has experience running transactional businesses, but the platforms can solve the problem once for all publishers.  PayPal probably has more value than eBay as a platform – it shows the value that solving the payment layer has for the platform. Creating a pan-regional payment platform is going to be vital.  Lots of people are trying at the moment, and I think the platforms are in the position best to do that.

Thanks for sharing your thoughts with ISG, Sebastien.