Insider Q&A: GameHouse’s Ken Murphy

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Seattle-based GameHouse has been one of the most dominant casual game developers, publishers, and distributors for years, boasting a playlist of popular titles including Bayou Blast and Slotorama.

“GameHouse was one of the earliest developers of casual games, so back in 2004, when RealNetworks looked to expand, GameHouse was their very first acquisition,” explains Ken Murphy, VP GameHouse Studios. “Fast forward over the years, and our business expanded into mobile gaming and social mobile gaming, and we came to the determination that the GameHouse brand itself was really a terrific one to keep going to market with.

“We developed a lot of great brand equity, and we were better known as a gaming brand than RealNetworks was, so we transitioned all of RealNetwork’s game activities over to the GameHouse brand, and that’s how we’ve been going to market the last three or four years exclusively.”

A strategy that has paid off with millions of casual gamers, including one of the largest bases of female gamers of any game company on the market.

Inside Mobile Apps recently sat down with Murphy for an exclusive interview about the casual game market, the free-to-play model, and how he sees GameHouse adapting in the ever-changing gaming space.

Here’s what he had to say…

[contextly_sidebar id=”9c7bf03420f2976092e5a48664f244b5″]Inside Mobile Apps: What have been the biggest shifts you’ve seen in the casual games market over the past few years?

Ken Murphy: I think the massive transitions that have occurred in the casual games space have really been platform driven. Those early days, the industry really grew on downloaded games, then as broadband became more ubiquitous in the late 90s and early 2000s, it gave consumers the ability to download with heavier payloads. Then with the advent of Facebook and the mass penetration of smartphones, it really changed the places people played these games, and as the places changed, you had the situation where the social networks in particular really drove forward the free-to-play, freemium model for casual games. Up to that point, casual games had very much driven their business based on the single pre-game purchase model and various subscriptions that were built around that. Facebook really changed that, but it took smartphones a while to catch up to that. If anything, the smartphone market looked a lot like the early PC market, where everything was driven by premium purchases. But now you see the freemium model becoming the dominant model on smartphones as well, with the one constant among all of this being the games themselves. A lot of the games still have the same characteristics that they had in the early days. The casual games are easy to learn, but difficult to master. They tend to be very well indexed for short bursts of gameplay. They tend to have a very broad appeal, even if the female demographic is the largest purchasing demographic, the games are enjoyed by both genders of all ages. The business models have adapted. The ways that they’re monetized, the way that the pricing works, and some of the gameplay has changed, but the core fundamentals of what makes a game great, that’s still the same today.

IMA: From your internal research, what are the monetization trends of free-to-play versus the premium model?

KM: What we’ve seen in the free-to-play space is that conversion rates to purchases have remained relatively consistent in the low single digits, just as they were in the days of try before you buy pre-game purchases. The total number of games people play has continued to grow as the market has grown, but what we did find is that when people do purchase in the free-to-play model, they tend to spend a little bit more than they did in the premium space, especially when the premium games were being so heavily discounted. In the early days, you’d see a premium game for $20 online, now depending on the discount models, that same game might be $1.99 to $5.99 depending on which of the discount models is there. Once you get a player engaged in a free-to-play game, their lifetime value in that game tends to be significantly higher than that. So we’ve seen a lot of the same basic conversion rates, but a better long-term propensity to spend in the free-to-play model.